Key Takeaways
- • SK Hynix shares rose as much as 3% in Seoul on Monday, defying a broader AI-stock selloff, after reports it is considering a special dividend of about 16tn won ($12bn), according to Bloomberg.
- • The reported payout represents the bulk of a 20tn won gain the company recorded on its Kioxia Holdings stake in the first half of the year.
- • DongA Ilbo reported the dividend could be announced alongside third-quarter earnings on Wednesday, potentially in instalments; SK Hynix says it is reviewing shareholder return options and has not decided on a special dividend.
- • Investor concern over AI infrastructure spending and data-centre debt is weighing on AI-linked equities, and specialist cloud providers Firmus Grid and Nscale have shelved or delayed IPOs.
- • Timefolio Asset Management's Kim Namho said the dividend and withdrawal of Solidigm's planned US listing support the stock near term but are unlikely to drive a sustained rally.
Summary
SK Hynix shares rallied on Monday, defying a broader selloff in AI-related stocks, after reports that the South Korean chipmaker is considering a special dividend of approximately 16tn won ($12bn), according to Bloomberg. The payout would represent the bulk of a 20tn won gain recorded on the company's investment in Japanese memory chipmaker Kioxia Holdings during the first half of the year. South Korean newspaper DongA Ilbo reported that the distribution could be announced alongside third-quarter earnings on Wednesday, potentially in instalments. The company has said it is reviewing shareholder return options but has not made a decision on a special dividend.
The stock climbed as much as 3% in Seoul before paring gains. Rival Samsung Electronics fell as much as 1.9%, and Kioxia declined 3.7%. The divergence reflects growing investor concern over the sustainability of the AI investment boom, including rising debt among data centre operators and escalating capital expenditure commitments, which has prompted investors to reduce exposure to AI-linked equities. Specialist cloud providers, including Australia's Firmus Grid and Britain's Nscale, have shelved or delayed planned initial public offerings amid deteriorating sentiment.
Kim Namho, a fund manager at Timefolio Asset Management, said the prospect of a dividend, together with SK Hynix's decision to withdraw the planned US listing of its Solidigm subsidiary, was supporting the stock in the near term but was unlikely to drive a sustained rally. Despite scepticism over AI infrastructure spending, major memory manufacturers including SK Hynix, Samsung, Micron Technology and Kioxia continue to expand production capacity, supported by multiyear supply agreements with technology groups including Meta and Amazon.
SK Hynix gained its Kioxia exposure through a Bain Capital-led consortium that acquired Toshiba's memory chip operations for $18bn in 2018. Kioxia's valuation has risen sharply since its Tokyo listing in 2024, generating significant gains for investors. Bain exited its remaining holding earlier this year, while SK Hynix continues to hold convertible bonds representing approximately 14% of Kioxia's equity.
The stock climbed as much as 3% in Seoul before paring gains. Rival Samsung Electronics fell as much as 1.9%, and Kioxia declined 3.7%. The divergence reflects growing investor concern over the sustainability of the AI investment boom, including rising debt among data centre operators and escalating capital expenditure commitments, which has prompted investors to reduce exposure to AI-linked equities. Specialist cloud providers, including Australia's Firmus Grid and Britain's Nscale, have shelved or delayed planned initial public offerings amid deteriorating sentiment.
Kim Namho, a fund manager at Timefolio Asset Management, said the prospect of a dividend, together with SK Hynix's decision to withdraw the planned US listing of its Solidigm subsidiary, was supporting the stock in the near term but was unlikely to drive a sustained rally. Despite scepticism over AI infrastructure spending, major memory manufacturers including SK Hynix, Samsung, Micron Technology and Kioxia continue to expand production capacity, supported by multiyear supply agreements with technology groups including Meta and Amazon.
SK Hynix gained its Kioxia exposure through a Bain Capital-led consortium that acquired Toshiba's memory chip operations for $18bn in 2018. Kioxia's valuation has risen sharply since its Tokyo listing in 2024, generating significant gains for investors. Bain exited its remaining holding earlier this year, while SK Hynix continues to hold convertible bonds representing approximately 14% of Kioxia's equity.
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