Riding the wave of the AI memory chip supercycle, Samsung Electronics is returning capital to shareholders at an unprecedented scale. On August 21, the world's largest memory chipmaker's board formally approved its 2026 shareholder return program, targeting a full-year payout of 90 trillion to 110 trillion Korean won (approximately $65 billion to $80 billion). This figure not only smashes the record for shareholder returns in South Korean corporate history but also elevates Samsung into the ranks of the world's top dividend giants, with a scale approaching Apple's $110 billion buyback scheme approved in 2024. Just two days earlier, rival SK Hynix unveiled a 40 trillion won (about $28.6 billion) share buyback and cancellation plan. Within a single week, South Korea's two memory powerhouses have jointly pledged up to 150 trillion won (around $108.6 billion) in shareholder returns, a cash giveaway contest ignited by the AI chip supercycle that is pushing the Korean stock market into an entirely new valuation era.

Breaking Down the Plan: 30 Trillion Won in Dividends First, Remainder Finalized Next January

According to regulatory filings submitted to the Korea Exchange, the specifics of Samsung's shareholder return program are as follows: For the third quarter, with the final amount confirmed at an October board meeting, cash dividends of approximately 30 trillion won will be distributed. Based on a regular quarterly dividend of about 2.45 trillion won, this implies a special dividend of roughly 27.55 trillion won for the third quarter. The expected dividend per share (DPS) stands at around 5,570 won, far exceeding the previous regular range of 1,400 won. For employee incentives, the board simultaneously approved a share buyback program of around 15 trillion won for compensation purposes. The remaining portion, to be decided by the board in January 2027, will factor in cash dividends, share buybacks, and cancellations, with the final structure determined after the company's full-year results are confirmed.

This record-breaking payout builds on Samsung's 2024-2026 three-year shareholder return policy, which commits to returning 50% of cumulative free cash flow over the period. From 2024 to 2025, Samsung had already distributed 19.6 trillion won in regular dividends, 1.3 trillion won in special dividends, and completed 8.4 trillion won in buybacks and cancellations, totaling 29.3 trillion won. Combined with the 2026 returns, the total shareholder payout for the 2024-2026 cycle is projected to reach between 120 trillion and 140 trillion won.

The Confidence Behind AI's Supercycle: Record 89.5 Trillion Won Quarterly Profit

The confidence behind Samsung's "blank check" stems from the epic profits delivered by the AI memory chip supercycle. In the second quarter of 2026, Samsung Electronics posted the strongest quarterly results in its history: revenue of 171.5 trillion won, up 130% year-over-year, and operating profit of 89.49 trillion won, surging 1,814% from a year earlier, both setting new all-time records. The Device Solutions division, which handles the memory chip business, generated quarterly revenue of 127.5 trillion won and operating profit of 89.2 trillion won. AI server-driven demand for memory chips is the core catalyst behind this earnings explosion.

By the end of the second quarter, Samsung's cash reserves had expanded sufficiently to support this massive payout. According to LSEG data and Reuters calculations, Samsung and SK Hynix are projected to hold a combined net cash position of $263 billion by year-end, more than double Nvidia's estimated net cash of $102 billion and exceeding the combined cash holdings of the other six members of the U.S. "Magnificent Seven" tech giants.

AI Boom Spurs a Cash Tsunami: The Return Race Between Samsung and SK Hynix

Samsung's aggressive shareholder rewards are a direct result of explosive growth in AI memory chip demand. As data centers drive rising demand for high-bandwidth memory (HBM) and DRAM, Samsung's cash flow has swelled rapidly. Meanwhile, on August 19, SK Hynix took the lead by announcing a 40 trillion won (about $28.6 billion) share buyback and cancellation plan. The buyback is set to begin on August 20 and last about three months, with all repurchased shares to be cancelled, marking the largest treasury stock cancellation in the history of South Korean listed companies. SK Hynix also committed to returning at least 50% of cumulative free cash flow from 2025 to 2027 to shareholders. Goldman Sachs projects this buyback is just the beginning of a larger return program, estimating SK Hynix could eventually return around 140 trillion won to shareholders, based on roughly 55% of free cash flow allocated to returns.

The combined net cash position of the two Korean memory giants is expected to reach $263 billion, surpassing even Nvidia's estimated cash pile. Facing mounting investor pressure, Samsung and SK Hynix have ultimately chosen to convert their AI windfall into tangible shareholder value. Tom Kang, research director at Counterpoint, noted, "This could help trigger broader structural changes in the Korean stock market. We see this as a solid step toward a more shareholder-centric management style, closer to what is typical in the U.S. market." Albert Yong, managing partner at Petra Capital Management, pointed out that preferred shares had previously traded at a "significant discount," and the recent rally may reflect market expectations of higher dividends on preferred stock.

Market Reaction: Expectations Priced In, Post-Market 'Buy the Rumor, Sell the News'

Despite the record-breaking scale of the plan, the market response displayed classic "buy the rumor, sell the news" behavior. Driven by expectations ahead of the announcement, Samsung Electronics closed up 3.87% in regular trading on Friday at 281,500 won. SK Hynix also gained 2.31% the same day. Lifted by the two memory giants, South Korea's KOSPI index closed up 0.88% at 6,912.95 points. However, in after-hours trading, Samsung's shares slipped about 3.91% on the NXT platform, as some investors had anticipated returns as high as 150 trillion won and the announcement largely met already-priced-in expectations. Kim Minji, fund manager at Must Asset Management, remarked, "Some investors recently expected shareholder returns of up to 150 trillion won, which explains the post-listing price volatility."

Meanwhile, the Korean won strengthened further on Friday, rising as much as 1% to 1,380.35 per U.S. dollar. Jung In Yun, CEO of Fibonacci Asset Management Global, noted that the key question for investors is no longer the nominal amount but "how the remaining funds will be returned, specifically the proportion allocated to share buybacks and cancellations versus special dividends."

A Historic Turning Point for Korea's Capital Markets

Samsung's 110 trillion won and SK Hynix's 40 trillion won, combined pledges of 150 trillion won (about $108.6 billion) within a single week, are fundamentally reshaping the investment logic of the Korean stock market. For years, the Korean market has been criticized by international investors for its low valuations and low dividends, a phenomenon often dubbed the "Korea Discount." Now, with Samsung pushing its three-year shareholder returns to between 120 trillion and 140 trillion won and SK Hynix firing the first shot with its 40 trillion won buyback and cancellation, this shareholder return revolution, fueled by AI dividends, is emerging as the strongest catalyst yet for dismantling the Korea Discount.

The successive actions of Samsung and SK Hynix signal that the massive profits of the AI era are forcing chaebol enterprises to pivot toward more shareholder-friendly capital allocation strategies. As Counterpoint's Tom Kang observed, South Korea is "moving toward a more shareholder-centric management style." This historic shift, led by the memory duopoly, is only just beginning. The market's final pricing will hinge on the quality of returns, including whether buybacks are accompanied by cancellations, the ratio of special to regular dividends, and the specific allocation of the remaining tens of trillions of won. With the January 2027 board meeting approaching, whether Samsung can further refine its return pathway will remain a key focus for investors.