Samsung SK Hynix investor payout pressure

Samsung Electronics and SK Hynix, the world's two largest memory chip makers, are facing growing investor pressure to increase shareholder returns through higher dividends or share buybacks. Despite reporting record profits driven by AI demand and amassing a combined $263 billion in net cash by year-end, both companies have provided scant detail on capital return plans, targeting only 50% of free cash flow. Investors, including Janus Henderson and Vista Global Asset Management, argue that this inefficient balance sheet and lack of commitment signal management uncertainty about the durability of AI earnings. SK Hynix shares have fallen 48% and Samsung 37% from June highs. JPMorgan cut its price target for SK Hynix, and retail platform Act launched a campaign for a $32 billion Samsung buyback. The issue also ties into the 'Korea discount' and government efforts to improve corporate governance.