SK Hynix has a new plan to boost its shares, just a month after a U.S. listing that failed to close its valuation gap with rival Micron.

The South Korean memory-chip maker said in a press release that its board had approved a plan to repurchase and fully cancel 40 trillion won ($29 billion) worth of shares over the three months starting Aug. 20.

The company also said it would return more than 50% of free cash flow to shareholders, having previously targeted within the range of 50%.

The South Korean company's American depositary receipts jumped 3.6% to $161.22 in early trading. Micron shares were up 0.9%, while memory storage company Sandisk rose 2%.

The S&P 500 was 0.4% higher.

SK Hynix said it was making the move because it believed its value was "not fully reflected in its current stock price."

The company raised $26.5 billion when it issued its ADRs last month, but the U.S. shares have struggled since then, sliding more than 8% through Tuesday's close.

The move lower has come as investors question how long the AI spending boom, which has triggered a surge in demand for memory chips, will last.

SK Hynix was fetching 6.4-times expected earnings for the current fiscal year as of Wednesday, compared with Micron's 12.9-times ratio. The listing of ADRs was supposed to bring SK Hynix's valuation in line with its U.S. rival.

The buyback could help close the gap by signaling to the market that management believes the stock is undervalued. Canceling shares could also help stabilize the stock, which has been volatile.