SK Hynix and Samsung shareholder return plans questioned: Micron and SanDisk call for 100% refund of excess cash

Comparatively, after Samsung Electronics and SK Hynix announced the introduction of a shareholder return plan to use more than 50% of free cash flow (FCF) for shareholder returns, SanDisk (SanDisk) and Micron (Micron) proposed to return 100% of “excess cash (excess cash)” to shareholders, causing the market to question the relatively low level of shareholder returns of Korean semiconductor companies. However, the Korean industry and financial institutions pointed out that the definitions of cash indicators based on the two types of policies are not the same, and it is unfair to just compare the ratio of “50%” to “100%.” The industry believes that Korean corporate return policies based on FCF are more definitive in terms of monetary forecasting, execution standards, and transparency.

According to our understanding, FCF generally refers to the cash generated by an enterprise through business activities, the remaining cash after deducting investment expenses such as capital expenses (CAPEX), etc., which can be calculated more objectively through data such as cash flow statements. Samsung Electronics previously announced that 50% of the three-year cumulative FCF from 2024 to 2026 will be used for shareholder returns; SK Hynix also plans to use more than 50% of the cumulative FCF for shareholder returns between 2025 and 2027. (Yonhap)