Samsung Electronics announced on Friday that it anticipates its shareholder payouts this year to reach up to 110 trillion won ($79.54 billion), including about 30 trillion won in cash dividends in the third quarter.
The previous peak in shareholder returns, which was 20.3 trillion won in 2020, would be more than five times smaller than the 110 trillion won.
As the AI boom drives demand for chips, Samsung has faced pressure from shareholders to repay some of the gains from its record-breaking profits, much like rival SK Hynix.
Additionally, Samsung Electronics announced on Friday that it has repurchased shares valued at 15 trillion won in exchange for employee stock bonuses.
In January 2027, the board will determine the remaining payouts, taking into account cash dividends, share buybacks, and share cancelations.
In accordance with its 2024–2026 shareholder return strategy, Samsung will provide shareholders 50% of the free cash flow that accumulates over the course of the three years.
Samsung’s stock increased by 3.5% on Friday, while SK Hynix’s increased by 4.4%. The main market increased by 0.8%.
Although some may have anticipated the entire package at once, Sanjeev Rana, head of research at CLSA Securities Korea, stated that the shareholder returns should “help set a floor for the share price.”
“From a share price perspective, a buyback would have been better as it would have created additional demand for shares in the market,” he added.
This week, SK Hynix announced that it will increase shareholder returns by repurchasing and canceling 40 trillion won worth of Treasury shares and allocating more than half of its free cash flow from 2025 to 2027.
Profits have increased dramatically.
Samsung announced a more than 250-fold increase in semiconductor earnings to 89 trillion won in the second quarter.
Although its shares have increased over 300% in the past year, they dropped from a record high in June as investors worried that AI expenditure would stagnate.
By the end of the year, Samsung and SK Hynix are expected to have a total of $263 billion in net cash.
According to LSEG data, that is more than twice the projected $102 billion of AI bellwether Nvidia and surpasses the total cash of the other six “Magnificent Seven” U.S. tech giants.
