Samsung board to discuss $72 billion shareholder return plan on Friday
Samsung Electronics is convening its board to deliberate a capital return program potentially exceeding $72 billion, reflecting intense pressure on South Korea's chipmakers to deploy record AI-driven profits.
Samsung Electronics will convene its board of directors on Friday afternoon to deliberate a new capital return program for investors. The meeting follows media reports indicating the package could exceed 100 trillion won, or roughly $72 billion.
The proposed initiative is expected to encompass special dividends alongside share buybacks and cancellations. A source familiar with the confidential discussions noted the package could represent a significant amount, though specific figures remain unconfirmed. A company spokesperson declined to comment on the matter.
The world’s top memory chipmaker faces mounting pressure to distribute its record-breaking profits. Both Samsung and its domestic rival SK Hynix have seen earnings surge as artificial intelligence drives insatiable demand for semiconductors.
SK Hynix set a high benchmark earlier this week by announcing plans to buy back and cancel 40 trillion won, or $28.6 billion, of treasury shares. The rival firm also committed to allocating more than half of its free cash flow generated between 2025 and 2027 toward boosting shareholder returns.
Samsung currently operates under a 2024 to 2026 policy that dedicates 50 percent of its three-year free cash flow to investors. The potential new package follows a stupendous second quarter where the company reported an 89 trillion won chip profit, marking a more than 250-fold increase.
This massive capital deployment highlights the unprecedented cash accumulation within the South Korean semiconductor sector. Samsung and SK Hynix are projected to hold a combined $263 billion in net cash by the end of the year.
That combined war chest is more than double the estimated $102 billion held by AI bellwether Nvidia. It also exceeds the total cash reserves of the other six members of the "Magnificent Seven" U.S. tech cohort, according to LSEG data and Reuters calculations.
Investors responded positively to the prospect of capital returns on Friday. Samsung shares climbed 3.5 percent, outperforming the 0.8 percent gain in the wider market, while SK Hynix stock rose 4.4 percent.
Despite the Friday gains, Samsung’s stock has retreated from a record high reached in June amid lingering concerns that artificial intelligence spending might decelerate. This follows a 300 percent surge in the company's shares over the preceding 12 months.
