Samsung and SK Hynix Shift to Shareholder Returns

Samsung Electronics Co. and SK Hynix Inc. are implementing increased shareholder returns, including dividends and buybacks, to support their share prices. This strategic shift comes as the artificial-intelligence-driven memory chip boom matures and investors anticipate a slowdown in earnings growth and pricing gains.

SK Hynix has established a third-quarter timeline to detail its specific shareholder-return plans, and Samsung is expected to follow with similar measures. To ensure these payouts remain sustainable and to mitigate historical earnings volatility, both companies are relying on long-term supply agreements.

Samsung expects these multi-year contracts to eventually cover 60% to 70% of its planned capacity. SK Hynix has already disclosed agreements with approximately 10 customers. Micron Technology Inc. has adopted a similar approach, having signed 16 long-term supply agreements by the end of the June quarter.