Samsung to return up to 110 trillion won in 2026

2026-08-21

Samsung Electronics said it will carry out shareholder returns worth up to 110 trillion won ($120 billion) in 2026. The move comes as investors have stepped up calls for larger returns on the back of profits swollen by AI demand.

Returns hit a record high

On a full-year basis, the amount would be the largest for a South Korean company. For Samsung alone, it would far exceed the previous peak of 20.3 trillion won in 2020, more than five times that level.

About 30 trillion won will be used for cash dividends, while the remaining up to 80 trillion won will be considered for share buybacks, cancellations and cash dividends. The final decision will be made by a board meeting scheduled for late January 2027, after the 2026 annual results are confirmed.

The 110 trillion won plan is based on a policy of returning 50% of cumulative free cash flow for 2024 to 2026 to shareholders. Samsung kept the 50% benchmark unchanged, but also said it would consider increasing additional returns if excess funds remain after dividends.

Rival SK Hynix also began a buyback worth about 40 trillion won on the 20th. All shares acquired will be cancelled. Behind the moves by South Korea's major chipmakers to deliver record returns is concern over weak share prices.

Chip profits at record highs

In the April-June quarter of 2026, Samsung's semiconductor division posted operating profit of 89 trillion won, up 223-fold from a year earlier, while SK's climbed sevenfold to 60 trillion won, both record highs.

Sales surged mainly in high-bandwidth memory (HBM), which is essential for AI data centres, allowing the companies to earn in just three months profits equivalent to almost a full year. Tight supply pushed up prices and profits swelled rapidly.

Even so, share prices have been moving lower despite the strong earnings. As investors look at the rapid expansion in AI demand, they have begun to worry about future oversupply and a deterioration in market conditions. Compared with their June peaks, Samsung has fallen to about 20% below that level and SK to about 40% below.

According to QUICK FactSet, forward price-to-earnings ratios remain low at 5.8 times for Samsung, 4.9 times for SK and 5.3 times for Kioxia Holdings. That suggests a broad view that the strong run in memory chipmakers may not last.

A bid to answer investor frustration

Investor frustration had also grown over Samsung and SK's failure to push ahead sufficiently with large shareholder returns and dividend increases. Both companies want to use money generated by the AI boom to boost returns, support their share prices and encourage longer-term holdings.

SK said its business competitiveness, cash-generating power and medium- to long-term growth potential have not been fully reflected in its current share price.

Japan's memory chipmaker Kioxia also conducted its first share buyback in August. It bought 80 billion yen worth of shares in the market over six days starting on August 3.

Kioxia shares hit a record high of 112,700 yen in June, then fell 60% by the end of July. Chief Financial Officer Yoshihiko Kawamura said: 'If the share price falls this much, we thought it would be a great chance to improve earnings per share.'

The lead is shifting from U.S. tech to chips

The moves by chipmakers show that the leading role in shareholder returns is shifting. Until now, U.S. tech giants have led the world's large-scale buybacks.

Apple announced a record $110 billion buyback in 2024, the largest in the world. Backed by abundant cash flow, it had been steadily increasing returns.

But the tide has turned as investment in AI infrastructure expands. Alphabet carried out about $46 billion in buybacks in 2025, but skipped them in the January-June 2026 period. Instead, it raised more than $100 billion through bonds and common stock issuance and is directing that money into data centre investment.

The picture is becoming clearer: tech companies are prioritising data centre investment, while chipmakers are channeling swollen profits into shareholder returns.

Still, it is difficult to see how long such massive payouts can continue. Tech companies are betting on sustained AI demand, and chipmakers will also have to accelerate investment in next-generation HBM and advanced semiconductors. Samsung and SK have planned new investment of about 80 trillion yen, and if they prioritise investment, returns will shrink. Conversely, if they put returns first, they may support share prices in the short term but still risk falling behind in the technology race.

The decisions by Samsung and SK raise a question: who will share the spoils of the AI boom, and how?

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