SK Hynix Plans Record $45 Billion Share Buyback
Listen to the story
SK Hynix, a major South Korean semiconductor maker, has announced a plan to buy back around 40 trillion won, about $45 billion, of its own shares.
This will be the largest share buyback ever carried out by a company in South Korea.
As part of the plan, SK Hynix will cancel the shares it buys back. Cancelling shares means they are removed permanently and can no longer be traded.
Companies use buybacks to strengthen shareholder returns, which means giving more value back to the people who own the company's shares. When there are fewer shares available, each remaining share can become more valuable.
SK Hynix is one of the world's top makers of memory chips, which are used in computers, smartphones, and other electronic devices.
News of the buyback also affected another company, Kioxia, a Japanese chipmaker. Kioxia's share price rose on the PTS market, a trading system that allows shares to be bought and sold outside normal stock exchange hours.
The rise in Kioxia's shares suggests that investors see the buyback as a positive sign for the wider chip industry, not just for SK Hynix itself.
Semiconductor companies have recently benefited from strong demand linked to artificial intelligence and other technologies, which has increased their profits.
Analysts often view large buybacks as a signal that a company's management is confident about its financial position and future earnings.
The move by SK Hynix is expected to attract attention from investors watching the chip sector closely in the coming months.
Vocabulary9 words
- buy back
- when a company purchases its own shares
- share
- a small part of ownership in a company
- cancel
- to remove something so it no longer exists
- shareholder returns
- money or value given back to people who own shares
- share price
- the cost of one share
- PTS market
- a trading system open after normal market hours
- semiconductor
- a material used to make computer chips
- memory chip
- a chip that stores data in electronic devices
- investor
- a person or company that puts money into businesses
Quiz
Answer key
1. Buy back and cancel its own shares 2. They rose on the PTS market 3. True
Fill-in-the-blank listening
Play the audio again and fill in the missing words as you listen.
SK Hynix, a major South Korean semiconductor maker, has announced a plan to buy back around 40 _____ won, about $45 billion, of its own shares.
This will be the largest share _____ ever carried out by a company in South Korea.
As part of the plan, SK Hynix will _____ the shares it buys back. Cancelling shares means they are removed permanently and can no longer be traded.
Companies use buybacks to strengthen shareholder _____, which means giving more value back to the people who own the company's shares.
SK Hynix is one of the world's top makers of _____ chips, which are used in computers, smartphones, and other electronic devices.
News of the buyback also affected another company, _____, a Japanese chipmaker.
Kioxia's share price rose on the _____ market, a trading system that allows shares to be bought and sold outside normal stock exchange hours.
Semiconductor companies have recently benefited from strong _____ linked to artificial intelligence and other technologies.
Analysts often view large buybacks as a signal that a company's management is _____ about its financial position and future earnings.
Discussion questions
- Why do you think companies buy back and cancel their own shares?
- How might SK Hynix's decision affect other companies in the chip industry, like Kioxia?
- Do you think this news is good for people who already own SK Hynix shares? Why?
- What role does artificial intelligence seem to be playing in the chip industry recently?