With no clear prospect of financial returns from investments in AI model developers, investors have launched an attack on memory vendors, who are starting to make huge sums of money amid the AI boom and shortage of related products. If SK Hynix has already announced that it is preparing to buy back $29 billion worth of stock, Samsung will announce its plan near the end of the month and is expected to return $72 billion to investors.
Image source: Samsung Electronics
This ratio is natural given the size of Samsung Electronics’ business, as the company remains the largest maker of memory chips. SK Hynix’s profits exceed Samsung’s in some aspects due to its focus on producing higher-margin HBM chips, and it still leads in terms of supply in the corresponding market segments. However, the AI boom has also pushed up the price of regular DDR5, so Samsung has the opportunity to generally earn more than SK Hynix.
According to reports, by the end of this month Reuters Referring to MoneyToday, Samsung will announce its intention to return more than $72 billion to shareholders in the form of dividends. The payment plan must be approved by the company’s board of directors by the end of August. Half of Samsung’s free cash flow should be allocated to these uses, as is the case with SK Hynix. However, such good news for shareholders does not have the most obvious consequences for the Korean memory maker itself. At the very least, the company’s employees have demanded hefty bonus increases, threatening strikes at times, and both manufacturers are involved in large projects to expand memory production in South Korea. All of these demands require significant capital, and the reality is that the AI revenue river is not going to suddenly become shallower in the coming years.
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