By Hyunjoo Jin, Joyce Lee and Cynthia Kim
SEOUL, Aug 21 (Reuters) - Samsung Electronics said on Friday that it expects its shareholder returns for this year could reach up to 110 trillion won ($79.54 billion), which includes 30 trillion won in cash dividends in the third quarter.
Samsung, which, like rival SK Hynix, has seen earnings soar as the AI boom creates insatiable demand for chips, has been under much pressure to return gains to shareholders given their record-breaking profits.
The 110 trillion
won would be over five times the size of the previous high in shareholder returns of 20.3 trillion won in 2020.
Samsung Electronics also bought back shares worth 15 trillion won for employee stock bonuses. Its board will decide remaining payouts in January 2027, with cash dividends, share buybacks and share cancellations to be considered.
Under its 2024 to 2026 shareholder return policy, Samsung is committing 50% of free cash flow accumulated over the three-year period to shareholders.
SK Hynix said this week it will buy back and cancel 40 trillion won ($28.6 billion) of treasury shares and allocate more than 50% of its free cash flow generated between 2025 and 2027 to boost shareholder returns.
Earnings gains have been stupendous.
In the second quarter, Samsung reported a more than 250-fold jump in chip profit to 89 trillion won. Its shares have surged 300% over the past 12 months but have come down from a record high in June amid concerns that AI spending could slow.
Samsung and SK Hynix are set to hold a combined $263 billion in net cash by the year's end. That is more than double the estimated $102 billion of AI bellwether Nvidia and exceeds the combined cash of the other six "Magnificent Seven" U.S. tech companies, LSEG data and Reuters calculations show.
On Friday, Samsung shares gained 3.5% while SK Hynix's stock climbed 4.4%. The wider market was up 0.8%.
($1 = 1,382.8700 won)
(Reporting by Cynthia Kim and Hyunjoo Jin; Editing by Ed Davies, Edwina Gibbs and Christian Schmollinger)
