An employee walks past the logo of SK Hynix at its headquarters in Seongnam, Republic of Korea. Chip giant SK Hynix has said it would buy back a record $28.9bn of its own shares as it looks to reassure investors as it is battered by growing worries about the AI investment boom. reports AFP.
The company, a key producer of advanced high-bandwidth memory (HBM) chips used to run artificial intelligence tools, has seen its shares soar this year as demand for the semiconductors surged. But after hitting a peak in June it fell around 50% through July amid a flight from the sector fuelled by concerns that the vast sums pumped into it will not see returns as early as hoped, if at all.
While it has enjoyed a bounce this month, it fell 9.8% on Wednesday as tech jitters returned and traders fretted over elevated inflation, surging government bond yields and rising oil prices. After Wednesday's close, the company said its board had approved the plan to buy 40tn won worth of shares to boost shareholder returns. "We have decided to acquire and cancel 40tn won worth of treasury shares for efficient capital reallocation and to enhance shareholder value," it said in a regulatory filing, adding that its shares were "undervalued" relative to the company's intrinsic value.
Record profits from SK Hynix and its domestic rival Samsung Electronics — whose advanced memory chips are essential for the fast-evolving AI sector — have fuelled optimism over South Korea's economic outlook this year. The gains in the two companies helped propel Korea's benchmark Kospi index to a record high above 9,000 points in mid-June, before it was dragged by the tech rout. The buyback comes after SK Group chairman Chey Tae-won purchased about 4.8bn won of its shares in late July, a move seen as an effort to demonstrate confidence in the company.
