TLDR
- SK Hynix stock rose over 2% in premarket Friday as chip-linked names caught a bid
- The company announced a $29 billion stock buyback, the largest treasury share cancellation by a South Korean listed company
- Samsung approved a rival shareholder return plan worth up to $78.9 billion for 2026
- J.P. Morgan analyst expects SK Hynix could commit to nearly $130 billion in additional shareholder returns through 2027
- SK Hynix is weighing a new memory-chip manufacturing facility in Japan’s Miyagi prefecture
SK Hynix (SKHY) stock rose more than 2% in Friday premarket trading, hitting $166.68, as investors responded to a string of bullish developments from the South Korean chipmaker.
The gains came as Nasdaq futures climbed 0.52% and S&P 500 futures added 0.32%, with chip-linked names broadly catching a bid.
SK Hynix this week unveiled a stock buyback plan worth roughly $29 billion, which it called the largest treasury share cancellation ever conducted by a South Korean listed company. The announcement came just weeks after the company’s U.S. listing.
Samsung Electronics fired back Friday, with its board approving a shareholder return plan for 2026 estimated at between $64.5 billion and $78.9 billion. Samsung called it five times the size of its previous record payout in 2020 and the largest ever by a Korean company.
The back-and-forth between the two memory-chip rivals has caught the attention of Wall Street. J.P. Morgan analyst Jay Kwon expects SK Hynix could go further at its third-quarter results, committing to a minimum of 180 trillion won, just short of $130 billion, in additional shareholder returns through 2027.
What This Means for U.S. Investors
That figure would be equivalent to 50% of the company’s accumulated free cash flow for 2025 to 2027, adjusted for existing return commitments.
“We cautiously expect SK Hynix to pursue additional shareholder returns through a combination of treasury stock acquisitions, cancellations, and dividends, with more focus on special dividends,” Kwon wrote in a research note.
For U.S. ADR holders, dividends will flow through, though custodian fees may apply. Stock buybacks, however, do not directly affect ADR holders.
SK Hynix also said it would return more than 50% of free cash flow to shareholders, a slight upgrade from its previous target of within the 50% range.
Japan Factory Could Expand SK Hynix’s Footprint
On top of the capital return news, Reuters reported Friday that SK Hynix is weighing plans for a new memory-chip manufacturing facility in Japan’s Miyagi prefecture. The potential investment could run into tens of trillions of won.
SK Group Chairman Chey Tae-won recently visited the Miyagi area. If the project moves forward, it would be the first large-scale semiconductor manufacturing investment in Japan by a South Korean chipmaker.
Miyagi is one of Japan’s designated semiconductor industry hubs, making it a strategically important location for any capacity expansion.
The stock carries a consensus Buy rating across 10 analysts, with an average price target of $245.50. The range runs from a low of $200 to a high of $320.
Recent initiations include Wolfe Research and RBC Capital both setting Outperform ratings with $200 targets, while Cantor Fitzgerald started coverage at Overweight with a $300 target, all on August 4.
By comparison, U.S. memory-chip maker Micron Technology is restricted from making any buyback announcement until at least December 9, due to conditions tied to government funding it received.
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