Samsung Electronics expects shareholder returns up to $80 billion this year

Samsung Electronics expects its shareholder returns for this year ??could reach up to 110 trillion won ($79.54 billion), including 30 trillion won in cash dividends in the third quarter, it said on Friday. 

The 110 trillion won would be over five times the size of the ‌previous high in shareholder returns of 20.3 trillion ​won in 2020. Like rival SK Hynix, ​Samsung has come under pressure from shareholders to return some of the gains from their record-breaking profits ​as the AI boom drives demand for chips.

  Samsung Electronics also said on Friday it has bought back shares worth 15 trillion won for employee stock bonuses. Its board will decide remaining payouts in January 2027, with cash dividends, share buybacks and share cancellations to be considered.

 

  Under its 2024 to ​2026 shareholder return policy, Samsung is committing 50% of free cash flow accumulated over the three-year period to ‌shareholders.

  On Friday, Samsung shares gained 3.5% while SK Hynix's stock climbed 4.4%. The wider market ​was up 0.8%. Sanjeev Rana, head of research at CLSA Securities Korea, said the shareholder returns should "help set a floor for the share price," although he said some may have expected the entire package in one go.

  "Also, from ‌a share price perspective a buyback ​would have been better as it would have ‌created additional demand for shares in the market," he said. SK Hynix said this week it ‌will ??buy back and cancel 40 trillion won of treasury shares and allocate more than 50% ​of its free cash flow generated between 2025 and 2027 to boost shareholder returns.

  Earnings have surged. In the second quarter, Samsung reported a more than 250-fold jump in ​chip profit to 89 trillion won. Its shares have climbed 300% over the last 12 months but fell from a record high in June as stock markets ‌became concerned that AI spending could slow.

  Samsung and SK Hynix are set to hold a combined $263 ‌billion in net cash by the year's end. That is more than double the estimated $102 billion of AI bellwether Nvidia and exceeds the combined cash of the other six "Magnificent Seven" U.S. tech companies, LSEG data and Reuters calculations show.

 

($1 = 1,382.8700 won)