SK Hynix ADR Climbs on Record $28.6 Billion Buyback as AI Memory Demand Fuels Record Profits

SEOUL — Shares of SK Hynix Inc. rose modestly in U.S. trading Friday, building on gains driven by the company’s announcement of a record share repurchase program, as the South Korean memory chipmaker continues to benefit from surging demand for high-bandwidth memory used in artificial intelligence systems.

The American depositary receipts, trading under the ticker SKHY, advanced about 0.45% to $163.82 in morning trading on the Nasdaq. The move followed a stronger session the previous day, when the ADRs climbed more than 4% after SK Hynix detailed plans to buy back and cancel 40 trillion won, or roughly $28.6 billion, of its shares.

The repurchase, covering approximately 24.07 million shares or about 3.3% of outstanding stock, is scheduled to run from mid-August through mid-November, after which the shares will be retired. The company also raised its shareholder-return target to more than 50% of cumulative free cash flow generated from 2025 through 2027, up from a previous ceiling of 50%. It indicated it would consider additional buybacks and dividends, with further details expected later this year.

In a regulatory filing, SK Hynix said the decision “stems from the assessment that the Company’s intrinsic value—underpinned by its business competitiveness, robust cash generation capability, and mid-to-long-term growth potential—is not fully reflected in its current stock price.”

The buyback ranks as one of the largest in South Korean corporate history and comes against a backdrop of volatile trading in semiconductor stocks. Seoul-listed shares of SK Hynix had fallen sharply earlier in the week amid a broader tech selloff before rebounding on the announcement. The company ended the second quarter with a net cash position of about 69 trillion won, providing substantial financial flexibility to fund returns while continuing heavy capital investment.

SK Hynix has been a primary beneficiary of the AI-driven memory supercycle. In the second quarter of 2026, the company reported record results, with revenue reaching 79.32 trillion won, up 257% from a year earlier and 51% sequentially. Operating profit climbed to 60.54 trillion won, representing a 76% operating margin, while net profit stood at 93.92 trillion won. Cumulative first-half revenue surpassed 100 trillion won for the first time in the company’s history.

Management attributed the performance to strong sales of high-value products, particularly high-bandwidth memory and advanced DRAM and NAND used in data centers. “As AI evolves into agentic forms that perform complex tasks on behalf of users and expands across various services, the underlying demand base for memory is broadening,” the company said in its earnings release. “Consequently, a structural shift is occurring where demand for both AI memory and conventional memory is expanding in tandem.”

SK Hynix began mass shipments of its HBM4 products in the second quarter and plans to ramp production further in the second half of the year. The company highlighted the technology’s operating speeds, power efficiency and cost competitiveness. It has finalized long-term agreements with around 10 key customers and continues discussions with additional clients to lock in multi-year supply.

“In a market environment where customer demand exceeds supply capabilities, the ability to deliver requested volumes in a timely manner has emerged as a core business competitiveness,” the company stated. Industry observers note that SK Hynix has maintained a leading position in the HBM market, particularly for Nvidia’s AI accelerators, though competition from Samsung Electronics and Micron Technology remains intense as all three expand capacity.

To support longer-term growth, SK Hynix has committed significant capital expenditure. It plans investments in the high 40 trillion won range this year and announced 54 trillion won in spending for new facilities in Yongin and Cheongju to expand production of AI memory. Cleanroom capacity from those projects is not expected online until late 2028 at the earliest. Executives have indicated that tight supply conditions could persist well beyond the current decade.

Wall Street analysts largely remain constructive on the stock. Consensus ratings lean toward Strong Buy, with average price targets implying substantial upside from current levels. Some firms have noted that the expanded buyback helps narrow the valuation gap relative to U.S. peers and reflects confidence in sustained free cash flow generation.

The ADR listing itself is relatively recent, providing U.S. investors direct access to one of the world’s top memory producers. Trading volumes have been elevated as the stock serves as a proxy for AI infrastructure spending. Memory prices have risen sharply across both specialized HBM and more conventional server DRAM and enterprise SSDs, supporting elevated margins industrywide.

Risks remain. The memory business has historically been cyclical, and any slowdown in hyperscaler capital spending or faster-than-expected capacity additions could pressure pricing. Geopolitical factors and currency fluctuations also influence results for a company whose primary listing is in Seoul. Recent analyst notes have flagged potential quarterly fluctuations in HBM shipments tied to the timing of next-generation AI platforms.

Nevertheless, the combination of record profitability, multi-year customer contracts, and a decisive capital-return program has reinforced investor focus on SK Hynix’s role in the AI supply chain. The company continues to emphasize technological leadership and disciplined capacity expansion as demand for high-performance memory extends from training clusters into inference workloads and broader computing architectures.

Market participants will monitor third-quarter results and any further details on shareholder returns for signals on how management balances investment needs with cash distribution. For now, the buyback announcement has provided a tangible demonstration of confidence in the durability of the current cycle.