SK Hynix sets tone for Korea Inc's cash dilemma

More shareholder payouts will follow. SK said it will target total returns of over half of cumulative free cash flow generated between 2025 and 2027, implying at least $163 billion in buybacks or dividends – or both – based on analyst forecasts on Visible Alpha. Little wonder the company's Seoul-traded shares were up 14% by late morning following the announcements.

The change of tack means SK is removing a ceiling of returning just 50% of free cash flow to shareholders – seen as one factor as to why it, along with cross-town rival Samsung Electronics, trades at a discount to more generous global peers. As a rough comparison, U.S. rivals Micron MU.O and Sandisk SNDK.O both expect to hand back 100% of "excess cash", loosely interpreted as what's left after investing in the business. Moreover, SK's shares are down roughly 50% from a July peak, so focusing on shareholder returns should soothe rattled investors somewhat.