- Samsung plans up to 110 trillion won in shareholder returns in 2024, including dividends
- The 110 trillion won return is over five times the previous peak in 2020 of 20.3 trillion won
- Samsung repurchased 15 trillion won in shares as employee stock bonuses this year
Samsung Electronics said on Friday that it anticipates a shareholder return of up to 110 trillion won ($79.54 billion) this year, including cash dividends of 30 trillion won in the third quarter. This enormous compensation package follows record-breaking profits fuelled by a chip supercycle powered by artificial intelligence.
Now Samsung, like competitor SK Hynix, has been under intense pressure to return gains to shareholders as the AI boom produces an insatiable demand for chips, according to a report by Reuters.
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The previous peak in shareholder returns, which was 20.3 trillion won in 2020, would be more than five times smaller than the 110 trillion won.
Additionally, Samsung Electronics repurchased 15 trillion won worth of shares as employee stock bonuses. In January 2027, the board will determine the remaining payouts, taking into account cash dividends, share buybacks, and share cancellations.
In accordance with its 2024–2026 shareholder return policy, Samsung is pledging to shareholders half of the free cash flow that has amassed over the course of the three years.
This Monday, SK Hynix announced that it will use more than half of its free cash flow from 2025 to 2027 to increase shareholder distributions and repurchase and cancel 40 trillion won ($28.6 billion) worth of Treasury shares.
Samsung announced a more than 250-fold increase in semiconductor earnings to 89 trillion won in the second quarter. Although its shares have increased by 300% in the last 12 months, they have fallen from a record high in June due to worries that AI expenditure may stagnate.
By the end of the year, Samsung and SK Hynix will have a total of $263 billion in net cash. According to LSEG data and Reuters calculations, that is more than twice the projected $102 billion of AI bellwether Nvidia and surpasses the total cash of the other six "Magnificent Seven" U.S. tech giants.
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Samsung's stock increased by 3.5% on Friday, while SK Hynix's increased by 4.4%. The new tab for the broader market (.KS11) increased by 0.8%.
Investors claim that both chipmakers are not giving shareholders enough money, although Samsung and SK Hynix are expected to have a combined net cash position that dwarfs Nvidia's.
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