SK Hynix shares rise to two-week high on report of $12 billion dividend

SK Hynix shares rose to a two-week high on Tuesday after South Korean newspaper Dong-A Ilbo reported that the memory chipmaker was considering a special dividend of about 16 trillion won ($12 billion), ahead of its third-quarter earnings announcement on Wednesday.

SK Hynix shares climbed 7.14% to 1,366,000 won, touching their highest level since October 14 and outperforming the broader KOSPI, which rose 3.81% in morning trading.

Dong-A Ilbo reported on Monday that the proposed special dividend could be funded by gains from SK Hynix's sale of its stake in Japanese memory chipmaker Kioxia. SK Hynix invested about 4 trillion won in Kioxia in 2018 through a Bain Capital-led consortium of US, Japanese and South Korean investors.

However, SK Hynix has not confirmed the reported dividend. In a regulatory filing on Monday, the company said it was reviewing various shareholder return measures to enhance shareholder value, but that no decisions had been made as of the filing date.

It said additional measures would be announced alongside its third-quarter results on Wednesday, subject to board approval.

The potential payout comes as investors press major memory chipmakers to return more cash following strong profits driven by demand for high-bandwidth memory and other chips used in artificial intelligence infrastructure.

In August, SK Hynix announced plans to buy back and cancel 40 trillion won worth of its own shares and allocate more than 50% of free cash flow generated between 2025 and 2027 to shareholder returns. The company also recently paused plans for a US listing of its Solidigm chip unit, citing market volatility.