SPXCY

[SEOUL] SK Hynix said it will announce shareholder return measures on Wednesday (Oct 28) when the South Korean chipmaker releases quarterly results, responding to a report that it is considering a special dividend of about 16 trillion won (US$12 billion).

South Korean newspaper Dong-A Ilbo reported on Monday that SK Hynix is considering the special dividend, which will be funded by gains from selling its stake in Japanese memory chipmaker Kioxia.

SK Hynix has not publicly disclosed details of the stake sale, which was completed earlier in 2026, and analysts estimate that it recognised hefty cumulative investment gains.

SK Hynix invested about 4 trillion won in Kioxia in 2018 through a Bain Capital-led consortium of US, Japanese and South Korean investors. Bain Capital sold its entire stake in Kioxia earlier in 2026, but SK Hynix did not disclose the size of the one-off gain it received when it exited the investment as part of Bain’s disposal.

SK Hynix continues to hold Kioxia bonds that can be converted into a roughly 14 per cent stake in Kioxia.

When asked about the media report by the stock exchange operator, SK Hynix said that it is “reviewing various shareholder return measures” and plans to announce them alongside third-quarter earnings on Wednesday. It did not elaborate.

Nvidia suppliers SK Hynix and Samsung Electronics have faced growing pressure from investors to return a bigger share of excess cash through dividends or share buybacks after record profits fuelled by booming demand for artificial intelligence memory chips.

The pressure increased especially after their shares plunged from record highs hit in June, partly on investor concerns over the durability of AI spending by US technology companies.

Shares rise, bucking wider sell-off

Thanks to the prospect of a large dividend payout, SK Hynix shares bucked the wider market that was down 1.3 per cent amid a sell-off in AI-related stocks.

Its shares rose as much as 3 per cent on Monday morning in Seoul, outperforming bigger rival Samsung Electronics’ 1.9 per cent decline and Kioxia’s 3.7 per cent retreat.

In August, SK Hynix said it will buy back and cancel 40 trillion won of its own shares and allocate more than 50 per cent of free cash flow generated between 2025 and 2027 to boost shareholder returns.

SK Hynix said on Friday it paused a planned US listing for its Solidigm chip unit due to market volatility – a move which also comes after it faced concerns from investors and regulators about the potential listing that had weighed on its shares.

The possibility of a dividend payout, along with SK Hynix’s decision to pull the US listing of its Solidigm unit, is helping to provide short-term support to the stock, said Kim Namho, a fund manager at Timefolio Asset Management.

But “it is not a factor that will trigger a sustained rise in the stock price”, he said. REUTERS, BLOOMBERG