SK Hynix: South Korean chip giant announces massive $28.6 billion share buyback plan
This is the largest share buyback programme ever carried out in South Korea
(Il Sole 24 Ore Radiocor) - South Korean chip giant SK Hynix has announced a $28.6 billion (40,000 billion won) share buyback plan, in an attempt to reassure investors concerned about the sustainability of investments in the artificial intelligence sector. Specifically, the company explains in a statement, the semiconductor manufacturer will repurchase and cancel up to 24 million of its own shares between 20 August and 19 November. This is the largest share buyback programme ever undertaken in South Korea and, according to SK Hynix, aims to achieve “an effective reallocation of capital” and to “increase shareholder value”. Indeed, according to the chip giant’s senior management, “the company’s intrinsic value — underpinned by its business competitiveness, strong cash-generating capacity and medium- to long-term growth potential — is not fully reflected in the current share price”.
SK Hynix’s share buyback plan follows the $26.5 billion raised just a month ago through its US listing, reflecting the vast amounts of capital that have fuelled the global artificial intelligence boom. However, the company – a key supplier of high-bandwidth memory chips to Nvidia Corp. – has been caught up in the recent sell-off due to fears that spending on AI-dedicated hardware may be short-lived.
At present, the South Korean giant’s shares are up 5.87 per cent in pre-market trading on Wall Street, but yesterday they fell by 9.8 per cent. On the Seoul Stock Exchange, they fell by 9.75 per cent.
