Samsung Electronics has announced the largest capital return programme in the history of the South Korean market, but investors believe that, given the current scale of profits from the AI boom, the company could do more.
Samsung’s shares fell by more than 8 per cent in early trading on Monday. The company had previously announced that in 2026 it would return between 90 and 110 trillion won – approximately 65–80 billion dollars – to shareholders. This is roughly five times more than the previous record set in 2020. Around 30 trillion won is set to be paid out to investors in the form of dividends in the third quarter.
The problem turned out to be not so much the scale of the programme as its structure. Samsung has maintained its policy of allocating 50 per cent of free cash flow from 2024 to 2026 to shareholder returns, whilst failing to present a share buyback and cancellation plan as robust as that of SK Hynix. Its competitor announced a share buyback and cancellation programme worth 40 trillion won, as well as an increase in returns to over 50 per cent of cumulative free cash flow (FCF) for the years 2025–2027.
The market’s reaction reflects a shift in expectations regarding semiconductor manufacturers. The AI infrastructure boom is generating ever-increasing cash flows for them, so investors are now looking not only at sales growth but also at how surplus cash is being utilised.
For Samsung, this presents a more difficult balancing act. The company is simultaneously planning over 110 trillion won in investment in infrastructure and research in 2026 to strengthen its position in AI semiconductors. Pressure for higher payouts may therefore increase, but returning capital too aggressively would limit the funds needed for the technology race against SK Hynix and other manufacturers.
