Key points
- Samsung and SK Hynix are forecast to post record profits
- Both companies' buybacks are nearing completion
- KB forecasts sharply higher Samsung shareholder returns
Samsung Electronics (005930) and SK Hynix (000660) rose in Seoul on October 1 as analysts forecast record third-quarter profits. But both companies' share buybacks are nearly finished. Samsung's should end within days, and SK Hynix's around mid-October.
Samsung gained 2.61 percent to 275,500 won ($202), while SK Hynix rose 3.1 percent to 1,831,000 won ($1,345). It was the first Korean trading session after Micron's quarterly results.
How big are the expected profits?
Analysts expect Samsung to report third-quarter operating profit of 108.7 trillion won ($79.8B), the first time a quarter would pass 100 trillion won ($73.5B), according to FnGuide (에프앤가이드) consensus. SK Hynix is expected to report 77.2 trillion won ($56.7B). Together, that's nearly eight times their combined operating profit a year earlier.
Memory prices are the reason. High-bandwidth memory, or HBM, the stacked memory used in AI chips, takes more than three times the wafers of regular DRAM to make. As the companies move factory space to HBM, there's less regular DRAM to sell.
"The share of production capacity for regular DRAM, excluding HBM, is expected to keep shrinking, from 73 percent in 2025 to 59 percent in 2027," said Kim Dong-won (김동원), head of research at KB Securities (KB증권), in a report on October 1.
What happens when the buybacks end?
Samsung set aside 15 trillion won ($11.0B) to buy back shares for employee stock awards, and had spent 87.3 percent of that by September 29. It has been buying about 2 million shares a day. SK Hynix's buyback is 40 trillion won ($29.4B), and was 75 percent done, at about 600,000 shares a day.
The buybacks are winding down after a month of heavy selling by foreign and individual investors. From August 28 to September 28, foreign investors sold a net 16.8 trillion won ($12.3B) of Kospi stocks, and individual investors sold a net 14.9 trillion won ($10.9B). A category of buyers that includes company buybacks bought a net 31.3 trillion won ($23.0B). Maeil Business (매일경제) called the buybacks an "oxygen mask" for the two stocks.
Neither company has announced a follow-on buyback. Samsung's board is due to set its quarterly dividend in October, and analysts are watching the late-October earnings calls for any new return plan.
How much could Samsung return to shareholders?
Kim at KB Securities expects much more cash to go back to Samsung shareholders. "Samsung Electronics is likely to achieve average quarterly operating profit of more than 100 trillion won in the second half of this year," he said.
"Assuming Samsung returns 50 percent of free cash flow to shareholders as it does now, shareholder returns are expected to expand more than four times, from 140 trillion won over the last three years to 600 trillion won over the next three years," he continued. The comparison covers the current 2024 to 2026 shareholder-return period and the following three years. In dollars, that's a move from about $103 billion to $441 billion.
Meanwhile, SK Hynix said on October 1 that nothing has been decided about a US listing for its subsidiary Solidigm.
Kim Dong-won's comments and the Maeil Business phrase are translated from Korean. Won figures are converted at 1,361.4 won to the dollar, the Naver Finance rate on October 1, 2026.
