SK Hynix, Samsung Shareholder Return Plans Questioned: Micron and SanDisk Propose 100% Return of Excess Cash

Odaily News: After Samsung Electronics and SK Hynix announced shareholder return plans aimed at allocating more than 50% of free cash flow (FCF) to shareholder returns, SanDisk and Micron have proposed returning 100% of "excess cash" to shareholders, raising questions about the relatively low level of shareholder returns among South Korean semiconductor companies. However, industry and financial institutions in South Korea point out that the cash metrics underlying the two types of policies are not defined the same way, making it unfair to directly compare the "50%" and "100%" ratios. Industry insiders believe that the FCF-based return policies of Korean companies actually offer greater certainty in terms of amount forecasting, implementation standards, and transparency.

It is understood that FCF typically refers to the cash remaining after deducting capital expenditures (CAPEX) and other investment outlays from cash generated by operating activities, and can be objectively calculated using data from cash flow statements. Samsung Electronics previously announced that 50% of its cumulative FCF from 2024 to 2026 would be allocated to shareholder returns; SK Hynix also plans to allocate more than 50% of cumulative FCF to shareholder returns over the 2025–2027 period. (Yonhap)