Global Market | SK Hynix weighs $12 billion special dividend ahead of Q3 Results: Reports

South Korean chipmaker SK Hynix said it would announce shareholder return measures on Wednesday alongside its third-quarter results, following a media report that the company was considering a special dividend of around 16 trillion won ($12 billion), Reuters reported.

South Korean newspaper Dong-A Ilbo reported on Monday that the company was considering a special dividend, funded by gains from the sale of its stake in Japanese memory chipmaker Kioxia.

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In a disclosure to the stock exchange operator, SK Hynix said it was reviewing various shareholder return measures and would announce details alongside its quarterly earnings on Wednesday. The company did not provide further information, Reuters reported.

SK Hynix has not publicly disclosed details of the Kioxia stake sale, which was completed earlier this year. Analysts estimate that the transaction generated substantial cumulative investment gains.

The South Korean chipmaker invested around 4 trillion won in Kioxia in 2018 through a consortium led by Bain Capital and comprising US, Japanese and South Korean investors.

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Investor Pressure Mounts for Higher Payouts
SK Hynix and rival Samsung Electronics, both key suppliers to Nvidia, have faced increasing pressure from investors to distribute a larger share of their excess cash through dividends and share buybacks following record profits driven by surging demand for artificial intelligence memory chips.

Investor concerns have intensified after the companies' shares retreated from record highs reached in June, partly reflecting doubts about the sustainability of AI-related spending by US technology companies.

SK Hynix shares rose 0.5% on Monday, outperforming the broader South Korean market, which fell 1.3%.

In August, SK Hynix announced plans to buy back and cancel shares worth 40 trillion won and allocate more than 50% of its free cash flow generated between 2025 and 2027 towards shareholder returns.

The company's latest review of potential payouts comes as investors seek greater clarity on how it plans to deploy the substantial cash generated by the AI memory boom.

Solidigm US Listing Put on Hold
Separately, SK Hynix said on Friday that it had paused plans for a US listing of its Solidigm chip unit, citing market volatility.

The decision followed investor and regulatory concerns about the proposed listing, which had weighed on the company's shares.

The developments highlight the growing scrutiny of capital allocation decisions at major semiconductor companies as they benefit from rising demand for AI infrastructure while investors push for stronger shareholder returns, Reuters reported.

(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)