The artificial-intelligence boom is generating a new wave of cash for memory-chip makers, giving investors an increasingly direct way to benefit from surging demand for AI data centers. SK Hynix plans to return $27.6 billion to shareholders through a massive stock buyback and cancellation, a move that highlights the growing financial strength of the global AI-memory supply chain for U.S. technology companies and investors.
SK Hynix said August 19 that its board approved a plan to repurchase $27.6 billion of its own shares and retire all of them. The buyback, the largest such cancellation announced by a South Korean listed company, comes as the chip maker rides strong demand for high-bandwidth memory, or HBM, used in AI accelerators and data-center systems.
The company plans to repurchase about 24.1 million shares, or roughly 3.3% of its outstanding stock, based on its August 18 closing price. The purchases will run from August 20 through November 19, with all acquired shares to be canceled after the program ends.
SK Hynix said its decision reflects a view that the market has yet to fully value its business competitiveness, cash-generation capacity and long-term growth prospects.
The company also raised the floor for shareholder returns, saying it will return at least 50% of free cash flow over the next three years. That compares with its previous policy of returning up to 50% of cumulative free cash flow generated from 2025 through 2027.
The shift comes as AI-related demand has sharply strengthened SK Hynix’s balance sheet. The company reported about $47.6 billion in net cash at the end of the second quarter, giving it greater flexibility to fund both expansion and shareholder returns.
For investors, the move illustrates how the AI infrastructure boom is reshaping capital allocation across the semiconductor industry. Memory makers that once focused heavily on navigating cyclical downturns are now generating enough cash from high-end AI memory to return substantial amounts to shareholders while continuing to invest for growth.
SK Hynix said it plans to combine share buybacks and cancellations with cash dividends. It is also considering higher dividends, including increases to its regular and special dividend programs.
The company had said in November that it would return up to 50% of cumulative free cash flow over the 2025-2027 period, while leaving open the possibility of accelerating shareholder returns if earnings and free cash flow improved significantly.
SK Hynix said it remains on track to meet its financial-health targets and intends to maintain a stable balance sheet while continuing to return capital to investors.
The company is expected to provide details on the size and structure of additional shareholder returns when it reports third-quarter results, subject to board approval.
The announcement followed a delay related to procedures surrounding SK Hynix’s American depositary receipt, or ADR, listing last month. The company had been reviewing its shareholder-return strategy but was unable to release new information during a 25-day prospectus-delivery period following the listing.
After the period ended earlier this month, SK Hynix convened its board and finalized the new policy.
The company has also signaled that it could announce further shareholder returns during its third-quarter earnings period, underscoring the increasing importance of capital allocation as AI demand transforms the economics of the memory-chip business.
