Report: SK Hynix weighs distributing 16 trillion won from Kioxia gains
Key Facts
SK Hynix is considering a special distribution of about 16 trillion won, or roughly $12 billion, from gains on the sale of its stake in Japan's Kioxia, according to a Dong-A Ilbo report cited by Reuters on October 26. The company has not confirmed the amount, announced a distribution or formally approved its execution. The report said the plan is under consideration, making the proposed return's size and the timing of its disclosure key issues for shareholders. The newspaper estimated the sale gains at about 20 trillion won and said the proposed distribution could return about 80% of them to shareholders. These figures remain estimates reported by the newspaper, and any execution depends on board approval.
The company announced in August that it was expanding its shareholder returns target, aiming to return more than 50% of cumulative free cash flow generated during its 2025–2027 program. SK Hynix said fixed and special dividends were among the options under consideration to increase returns. It said details on the size of returns and how they would be implemented would be announced after board approval when third-quarter results are released. This places the reported distribution within a returns policy the company has already announced, but does not turn the amount cited in the report into a final decision. The company said, "Fixed and special dividends are under consideration."
The report follows a second quarter in which SK Hynix posted revenue of 79.3187 trillion won and operating profit of 60.5426 trillion won. The company attributed the record results to continued demand linked to expanding investment in AI infrastructure and rising prices for high-performance products designed for AI servers. Revenue rose 257% year on year, while operating profit increased 557%. Revenue in the second quarter of 2025 was 22.232 trillion won, and operating profit was 9.2129 trillion won. These results link strong operating earnings to a surge in memory demand, while the proposed distribution is tied to gains from the sale of the Kioxia stake.
The company strengthened its cash position during the second quarter, with cash and cash equivalents reaching 88 trillion won at quarter-end, up 33.6 trillion won from the previous quarter. Total debt fell 0.7 trillion won to 18.6 trillion won, lifting net cash to 69.4 trillion won. These figures provide additional financial context as the company considers options to expand returns, but do not by themselves establish that the distribution amount cited in the newspaper report has been approved. The company has also not formally announced details on the amount or execution, saying both await board approval. Second-quarter data show the discussion is taking place during a period of a substantial increase in liquidity and net cash.
On future demand, SK Hynix said it had signed long-term agreements with about 10 customers, including strategic partners, to support supply stability over the medium and long term. This comes as the company has linked its record results to continued investment in AI infrastructure and demand for high-performance server products. The newspaper report did not specify whether these agreements are directly related to the gains from the Kioxia sale or the distribution plan under consideration. The agreements, however, form part of the company's business backdrop in a memory market where demand linked to expanding data centers and AI is growing, according to the company’s account of the drivers behind its results. The company is scheduled to announce third-quarter results on October 28, with the earnings statement due before 9 a.m. Seoul time, followed by an investor call at 9 a.m. It is expected to clarify then whether it will disclose details of its returns policy after board approval.