SK hynix (SKHY.US) announced on Friday a dividend of 375 won per share, alongside plans to finalize and disclose further shareholder value enhancement measures in the third quarter. This move comes as analysts publicly urge the company to increase its payout ratio.

The South Korean chipmaker is following signals from rival Samsung, which stated in its second-quarter earnings report on July 30 that its board and management are actively discussing specific shareholder return policies, including potential special dividends and a new buyback program. Both companies are riding the AI memory boom, with soaring profits from high-bandwidth memory (HBM) driving record second-quarter operating income. Samsung reported around 146 trillion won (approximately $105.9 billion) in operating profit for the first half, while SK hynix posted about 98 trillion won (roughly $71.1 billion).

Despite their massive cash piles, analysts are raising concerns about the companies' conservative payout approach. Combined net cash reserves for Samsung and SK hynix are expected to reach $263 billion by year-end, more than double that of Nvidia (about $102 billion) and exceeding the combined cash holdings of the other six U.S. tech giants. Analysts estimate Samsung will generate about 200 trillion won ($145 billion) in free cash flow this year, while SK hynix is expected to generate around 100 trillion won. Both firms have committed to allocating 50% of free cash flow to shareholder returns, a stark contrast to U.S. memory maker Micron Technology, which pledged a 100% payout ratio in June.

This gap has fueled investor dissatisfaction and speculation that management may be skeptical about the long-term sustainability of the AI memory boom, contributing to significant share price declines from recent highs. JPMorgan recently cut its price target for SK hynix, stating that "a clear capital allocation stance is crucial to restoring market confidence." Richard Clode, a portfolio manager at Janus Henderson, publicly urged SK hynix to raise its shareholder return ratio to 80% or higher, arguing that sticking to 50% of free cash flow inefficiently utilizes balance sheet capital.