Samsung Electronics scheduled a board meeting for Friday afternoon to discuss a new shareholder return package, according to a person familiar with the matter. The meeting follows reports from South Korean media outlet MoneyToday that the plan could be valued at more than 100 trillion won, or approximately $72 billion. A company spokesperson declined to comment on the matter.
The discussions come as Samsung and its competitor, SK Hynix, face increased pressure from shareholders to distribute gains following record profits driven by demand for artificial intelligence (AI) chips. Samsung previously reported a more than 250-fold increase in chip profit to 89 trillion won during the second quarter. The company’s current policy for 2024 through 2026 commits 50% of its three-year free cash flow to shareholder returns.
Board members are expected to consider several methods for distributing capital, including special dividends, share buybacks, and share cancellations. The source, who spoke on the condition of anonymity because the plans are confidential, noted the package could involve a significant amount but did not provide specific figures. Earlier this week, SK Hynix announced its own plan to buy back and cancel $28.6 billion in treasury shares while allocating half of its free cash flow from 2025 to 2027 for shareholder returns.
The magnitude of this cash reserve is notable within the global technology sector. The combined $263 billion held by the two South Korean firms is more than double the $102 billion estimated for U.S.-based Nvidia and exceeds the total cash held by the other six companies in the "Magnificent Seven" U.S. tech group. The decision by Samsung to potentially release a record-sized return package indicates how AI-driven revenue is shifting capital structures for major hardware manufacturers.
Investors and market analysts are monitoring whether these payouts will satisfy demands for higher returns or if concerns regarding a potential slowdown in AI spending will persist. Samsung shares rose 3.5% on Friday following the news of the meeting. The company is expected to formally announce the details of the new shareholder return package later this month, which will clarify the exact timing and methods by which the capital will be distributed to stockholders.