Samsung approves up to $80B shareholder return, largest ever by a Korean company

Samsung Electronics approved a shareholder return plan on Friday estimated at 90 trillion to 110 trillion won ($65 billion to $80 billion), the largest ever by a Korean company and roughly five times its previous record of 20.3 trillion won set in 2020.cnbc+1

The announcement caps a blockbuster week for capital returns among South Korea's chip giants, coming days after rival SK Hynix ↗ 0.20% unveiled a 40 trillion won share buyback program.marketwatch+1

What Samsung Is Returning

Samsung's board approved approximately 30 trillion won in cash dividends for the third quarter, including regular quarterly payouts, with details to be finalized at a board meeting in late October. The remaining returns will be decided at a January 2027 board meeting once full-year 2026 results are confirmed, with the company considering a combination of additional cash dividends and share buybacks followed by cancellations.news.samsung+2

Separately, the board approved a share buyback of about 15 trillion won for employee compensation, which Samsung said is also expected to contribute to shareholder value.koreaherald+1

The plan fulfills Samsung's three-year shareholder return policy running from 2024 through 2026, which commits 50 percent of free cash flow to shareholders. Including this year's returns, Samsung expects total payouts over the three-year period to reach 120 trillion to 140 trillion won.news.samsung+1

AI Boom Fueling the Windfall

The record payout is driven by sustained demand for AI infrastructure. Samsung has posted the highest operating profit in its history for three consecutive quarters, according to Yahoo Finance. Samsung's stock is up around 135 percent year-to-date as the company works to catch up with SK Hynix in high-bandwidth memory chips used in AI systems.finance.yahoo+1

According to Bloomberg, SK Hynix's net cash is estimated to have topped 100 trillion won, while both companies are ramping capital expenditure — SK Hynix earmarking at least $31 billion this year and Samsung planning more than $73 billion.bloomberg

Risks on the Horizon

KED Global reported that Samsung's package fell short of some market expectations of up to $115 billion. Bloomberg noted the scale of commitments from both companies reflects "a boom being milked on all sides," warning that if AI spending levels start to fall, "these companies may wish they had kept more in reserve".kedglobal+1

"The record shareholder return is aimed at ensuring that the benefits of the company's growth are shared with shareholders in a tangible way," a Samsung official told The Korea Herald.koreaherald