A new forecast from S&P Global Market Intelligence, released on September 8, indicates that SK hynix could unveil another share repurchase program in the fourth quarter of this year, driven by the robust demand for AI memory chips. The projected buyback is estimated to range between 20 trillion and 40 trillion Korean won, equivalent to approximately $28 billion USD.

Encouragingly, the company is expected to maintain its capacity for substantial dividend payouts even after completing this large-scale repurchase initiative. This development serves as a powerful catalyst for the South Korean government's "Corporate Value-up" program, which aims to enhance shareholder returns and restructure market practices.

Mohammad Hassan, who leads Asia-Pacific dividend forecasts at S&P, stated in an interview that the lower bound for SK hynix's new buyback is projected at 20 trillion won, with a possibility of again reaching the 40 trillion won ceiling. Following this positive outlook, ADRs of SK hynix surged over 6% on Tuesday, closing at $187.99, and its Korean-listed shares gained as much as 5% at Wednesday's market open.

Hassan also anticipates that a greater number of South Korean listed companies will announce their own buyback plans in the fourth quarter. He added, "More and more companies will emulate this approach, as it establishes a new benchmark for reasonable shareholder returns among listed entities."

Shifting Toward Normalized Buybacks with Robust Cash Flow

According to S&P's analysis, SK hynix's shareholder return strategy is evolving from a traditional one-off boost into a more systematic and normalized practice. The company has already completed a 40 trillion won buyback-and-cancellation program and has committed to allocating over 50% of its free cash flow to shareholder returns.

Importantly, supported by an excellent cash flow position, SK hynix retains the ability to distribute "quite substantial and generous dividends" even while continuing multi-trillion won scale buybacks. This comes as part of broader efforts by the South Korean government to address the long-standing "Korea discount" in its capital markets through the "Corporate Value-up Program," which encourages firms to strengthen market capitalization management via measures like canceling treasury shares and raising dividends.

In a related move, Samsung Electronics has already taken the lead in responding to regulatory guidance by canceling over 87 million treasury shares and introducing a massive dividend plan. Hassan remarked that Samsung Electronics' record-breaking dividends, combined with SK hynix's normalized buyback approach, will set new standards for market capitalization management and corporate governance in the local market, delivering a significant positive impact on the entire Korean stock exchange.