(Aug 20): Samsung Electronics Co is planning to announce a shareholder return plan topping 100 trillion won (US$72 billion or RM290 billion), MoneyToday reported citing unidentified industry officials, a day after rival SK Hynix Inc announced a record stock buy-back.

The company plans to use 50% of free cash flow for shareholder returns, with the measures expected to focus mainly on cash dividends, according to the report.

That ratio is similar to the proportion of capital that rival SK Hynix, which this week unveiled its own 40 trillion won stock repurchase programme, intends to hand out to shareholders through 2027.

Samsung said in a text message that it had no comment on the report, pointing to remarks made by its chief financial officer during its July earnings call.

“We will soon share a plan to find the optimal balance between maximising shareholder value and reinvestment for future growth while maximizing shareholder returns,” CFO Park Sooncheol said at that time.

SK Hynix shares surged as much as 13% in Seoul on Thursday following the announcement, while Samsung advanced more than 10% at the day’s peak. The moves come after a bout of volatility last month tested the artificial intellligence (AI)-fuelled rally and raised questions about its durability.

“We believe the initiative is expected to serve as a meaningful floor for the share price, providing tangible downside support in the near term,” Citigroup said in a note referring to SK Hynix’s plans. The decision represents a clear articulation of management’s “conviction in mid-to-long-term memory outlook,” Citigroup added.

The shareholder returns underscore the chipmakers’ confidence that they have the financial firepower to support their stocks while continuing to fund the heavy investment needed to capitalise on AI-driven demand.

Uploaded by Tham Yek Lee