1. Key points from Samsung's Board Meeting:
① Approved 2026 Shareholder Return Plan: The return in 2026 is estimated at approximately 90 trillion to 110 trillion KRW, with a cumulative total return of 120 trillion to 140 trillion KRW over the three years (2024-2026).
② Q3 Dividend of Approximately 30 Trillion KRW: A cash dividend of approximately 30 trillion KRW (including regular dividends) is planned for the third quarter of this year. The specific amount and details will be finalized at the Board meeting at the end of October.
③ Remaining Returns to be Decided in January: The method for returning the remaining funds after the 30 trillion KRW dividend has not yet been determined. Buybacks and cancellations or additional dividends will be considered. The specific amount and method will be determined at the Board meeting at the end of January next year, after this year's operating results are finalized.
④ Approved 15 Trillion KRW Employee Incentive Buyback: A resolution was passed to approve a share buyback plan of approximately 15 trillion KRW for employee compensation incentives. The company believes this measure will also enhance shareholder value.
⑤ Calculation Method: The 90 trillion to 110 trillion won figure is derived from 50% of the cumulative FCF over the three years 2024-2026, minus the 29.3 trillion won already returned in 2024-2025 (excluding LTA prepayments and employee stock incentive-related expenses). This is a current financial estimate, and the final amount may be adjusted due to changes in performance, investment, and cash flow.
2. What does 110 trillion won mean?
① From a longitudinal perspective, a maximum shareholder return of 110 trillion won would be the largest single-year shareholder return plan in the history of Korean companies, approximately five times the historical peak in 2020 (20.3 trillion won), but lower than market expectations (100 trillion to ~200 trillion won).
② Horizontally, Samsung's net cash on hand in Q2 2026 was approximately 167 trillion won. 110 trillion won represents 66% of this cash returned to shareholders. Samsung's estimated capital expenditure for the entire year of 2026 is approximately 62 trillion won, making 110 trillion won about 1.8 times the total capital expenditure for the year.
3. Samsung vs. SK Hynix: Two "Cash Spraying" Models
① In terms of pace: Samsung is proceeding in stages, distributing cash dividends in Q3 and deciding on the remaining portion in January next year; SK Hynix is acting swiftly, completing its share buyback and cancellation within three months.
② In terms of tools: Samsung primarily uses cash dividends, which is more stable due to regulatory constraints; SK Hynix's pure buyback and cancellation approach is more aggressive in comparison.
③ In terms of scale: Samsung's total amount is larger, but SK Hynix's commitment to "returning over 50% of accumulated free cash flow" offers more flexibility.
4. Market Impact:
① Enhanced Attractiveness of Korean Heavyweight Stocks: Samsung and SK Hynix are the most important weighted stocks in the KOSPI index. The simultaneous significant increase in shareholder returns by both companies is expected to enhance the attractiveness of large Korean technology stocks to institutional investors.
② Potential to Alleviate the "Korean Discount": Large Korean companies have historically generally suffered from high cash reserves and insufficient shareholder returns. The simultaneous increase in return ratios by Samsung and SK Hynix may drive Korean companies to shift from "high cash reserves" to "high cash reserves + high shareholder returns," potentially improving market valuations in the long term.
③ Fostering a New Capital Return Model: Growth in AI demand is driving improved profitability in HBM and memory sectors. Both companies are beginning to allocate a higher proportion of their free cash flow to dividends and share buybacks, potentially creating a new cycle of "AI demand growth → improved profitability → increased cash flow → expanded investment + shareholder returns."
④ Potential Risks: If AI computing power investment slows down and DRAM/HBM prices fall, corporate free cash flow may shrink, affecting the actual return. Furthermore, the market's revaluation from "cyclical stocks" to "high-return technology stocks" will take time; the key lies in the ability to consistently deliver on return promises.
