SK Hynix to announce steps to boost shareholder returns on Wednesday

SEOUL, Oct 26 (Reuters) – SK Hynix said it will announce shareholder return measures on Wednesday when the South Korean chipmaker releases quarterly results, responding to a report that it ​is considering a special dividend of about 16 trillion won ($12 ‌billion).

South Korean newspaper Dong-A Ilbo reported on Monday that SK Hynix is considering the special dividend, which will be funded by gains from selling its stake in Japanese memory chipmaker Kioxia.

SK Hynix has not publicly disclosed details of the ‌stake ​sale, which was completed earlier this year, ⁠and analysts estimate that it ⁠recognised hefty cumulative investment gains.

SK Hynix invested about 4 trillion won in Kioxia in 2018 through a Bain Capital-led consortium of US, Japanese and South Korean investors.

When asked about the media report ​by the stock exchange operator, SK Hynix said that it is “reviewing various shareholder return measures” and plans to announce them alongside ⁠third-quarter earnings on Wednesday. It did not ⁠elaborate.

Nvidia suppliers SK Hynix and Samsung Electronics have ​faced growing pressure from investors to return a bigger share of excess ​cash through dividends or share buybacks after record profits fuelled ‌by booming demand for AI memory chips.

The pressure increased especially after their shares plunged from record highs hit in June, partly on investor concerns over the durability of AI spending by US technology companies.

SK ⁠Hynix shares firmed up 0.5%, bucking the wider market that was down 1.3%.

In August, SK Hynix said it will buy back and cancel 40 ⁠trillion won of ‌its own shares and allocate more than 50% ⁠of free cash flow generated between 2025 and 2027 ​to ‌boost shareholder returns.

SK Hynix said on Friday it ​paused a ⁠planned US listing for its Solidigm chip unit due to market volatility — a move which also comes after it faced concerns from investors and regulators about the potential listing that had weighed on its shares.

($1 = 1,323.6000 won)

(Reporting by Hyunjoo Jin and Joyce Lee; Editing by Tom Hogue ​and Muralikumar Anantharaman)