Since the beginning of this year, the stock prices of Samsung Electronics and SK Hynix have moved in the same direction on 80% of trading days, reflecting the growing demand and rising prices for memory semiconductors driven by the expansion of the artificial intelligence (AI) industry. However, around the announcement of their third-quarter earnings, market evaluations regarding shareholder return policies diverged, leading to different stock movements.
According to the Korea Exchange, from the start of the year until October 30, there were 162 trading days when the stock prices of Samsung Electronics and SK Hynix rose or fell together, accounting for 80.2% of the total 202 trading days.
On 91 days, both stocks rose, while they fell together on 71 days. There were 19 days when only SK Hynix's stock rose and 15 days when only Samsung Electronics' stock rose, with the remaining six days showing no significant movement for one or both stocks.
The correlation in stock price movements between the two companies increased from 66.5% last year and 60.7% in 2024 to 80.2% this year. This trend is interpreted as a result of the overall market conditions having a greater impact than individual companies' technological competitiveness, as the demand for memory chips and price increases driven by AI industry growth have improved the performance of both companies.
However, around the announcement of their third-quarter earnings, the stock prices of the two companies diverged.
On October 28, both Samsung Electronics and SK Hynix saw significant increases of 9% to 10%. This surge was influenced by the confirmation of rapid revenue growth and a return to profitability in adjusted operating income for the first half of the year following the IPO filing of the U.S. AI company Anthropic, alleviating some concerns about profitability in the AI sector.
However, the following day, October 29, Samsung Electronics' stock reversed course and fell by 4.13% after it announced its third-quarter results, while SK Hynix's stock rose by 2.62% after releasing its results a day earlier. Both companies reported strong earnings, but market reactions differed.
On October 30, following a sharp decline in U.S. tech stocks, Samsung Electronics dropped by 3.02% and SK Hynix fell by 7.08%, moving in the same direction again.
Recent earnings announcements have focused market attention on shareholder return policies.
SK Hynix has outlined a shareholder return plan worth approximately 100 trillion won for the year, including a recently completed 40 trillion won share buyback. The cash dividend is expected to exceed 30 trillion won, with share buybacks and cancellations exceeding 60 trillion won.
During the earnings conference call, SK Hynix revealed that the demand for high-bandwidth memory (HBM) requested by customers exceeds the available supply by more than double, and that D램 and HBM quantities are essentially sold out until 2029, demonstrating confidence in long-term demand.
SK Hynix CEO Kwak Noh-jung's direct participation in the conference call and the decision to withdraw the IPO plan for its U.S. subsidiary Solidigm, which raised concerns about shareholder value dilution, were also viewed positively.
In contrast, Samsung Electronics announced a shareholder return policy of up to 110 trillion won, including a 30 trillion won cash dividend, but specific details will be finalized at a board meeting scheduled for the end of January next year.
Earlier, in August, Samsung Electronics' board approved a shareholder return plan for 2026, ranging from 90 trillion to 110 trillion won. While both companies proposed large-scale shareholder return plans, the lack of specific execution details from Samsung Electronics has led to mixed market evaluations.
An anonymous semiconductor analyst noted, "Samsung Electronics' failure to provide additional information on shareholder returns during this earnings announcement appears to have had the most significant impact on its stock decline. In contrast, SK Hynix's immediate initiation of share buybacks and strong demand outlook created a different atmosphere during its conference call."
During the second-quarter earnings announcement, the sustainability of the memory boom was a major focus, with the market needing time to assess the effectiveness of long-term supply agreements (LTA). On July 29, the day of SK Hynix's second-quarter earnings announcement, its stock fell by 9.61%, and Samsung Electronics, which announced its results the following day, also dropped by 0.72%. On the same day, SK Hynix experienced an additional decline of 5.64%.
Kiwoom Securities analyst Han Ji-young stated, "While stock prices rise, the focus is on profit size and visibility, but when profits increase and stock prices fall, other factors need to support this. Recently, there has been a shift in interest toward how companies are returning cash to shareholders, essentially monetizing their growth."
* This article has been translated by AI.
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