Samsung Electronics Co plans to buy back about 10 trillion won (US$7.2 billion) of its own stock over the next year, putting in motion one of the larger shareholder return programs in its history.
South Korea’s biggest company would repurchase the stock in stages over the coming 12 months, it said in a regulatory filing on Friday.
As a first step, it would buy back about 3 trillion won of paper starting today up until February next year, all of which it would cancel. The board would deliberate on how best to effect the remaining 7 trillion won of buybacks.
Photo: AP
The move coincides with investors’ growing concerns about the firm’s memory chip business, which is struggling to keep pace with SK Hynix Inc.
Samsung’s smaller rival has become the dominant supplier of high-bandwidth memory (HBM) to Nvidia Corp, which uses the cutting-edge chips in its popular artificial intelligence (AI) accelerators.
That has sparked fears that Samsung — long the dominant force in global memory semiconductors — is missing out on the AI boom.
Investors are also trying to gauge its vulnerability to US president-elect Donald Trump’s protectionist trade policy, given its exposure to China.
Samsung’s shares rose 8.6 percent on Friday before the buyback announcement, though it remains down 32 percent on the year.
The world’s largest maker of smartphones is also grappling with a consumer electronics slump globally.
Its stock is trading at a discount of more than 10 percent to the consensus estimate for its one-year forward accounting book value, according to data compiled by Bloomberg.
Last month, Samsung declared progress in qualifying and supplying its most advanced AI memory chips to Nvidia.
The company now expects to start selling its most advanced HBM3E memory chips in the fourth quarter, Jaejune Kim, executive vice president of Samsung’s memory business, said on an earnings call at the time.
Still, some investors remain cautious about the outlook.
“A lower valuation is justified given trade risks around Korea and also the catch-up in HBM, which will take time, and a weak memory environment,” said Sat Duhra, a fund manager at Janus Henderson Group.
“There are better tech stocks to own here — most of them are in Taiwan,” he said.
Nvidia Corp’s demand for advanced packaging from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) remains strong though the kind of technology it needs is changing, Nvidia CEO Jensen Huang (黃仁勳) said yesterday, after he was asked whether the company was cutting orders. Nvidia’s most advanced artificial intelligence (AI) chip, Blackwell, consists of multiple chips glued together using a complex chip-on-wafer-on-substrate (CoWoS) advanced packaging technology offered by TSMC, Nvidia’s main contract chipmaker. “As we move into Blackwell, we will use largely CoWoS-L. Of course, we’re still manufacturing Hopper, and Hopper will use CowoS-S. We will also transition the CoWoS-S capacity to CoWos-L,” Huang said
Nvidia Corp CEO Jensen Huang (黃仁勳) is expected to miss the inauguration of US president-elect Donald Trump on Monday, bucking a trend among high-profile US technology leaders. Huang is visiting East Asia this week, as he typically does around the time of the Lunar New Year, a person familiar with the situation said. He has never previously attended a US presidential inauguration, said the person, who asked not to be identified, because the plans have not been announced. That makes Nvidia an exception among the most valuable technology companies, most of which are sending cofounders or CEOs to the event. That includes
TARIFF TRADE-OFF: Machinery exports to China dropped after Beijing ended its tariff reductions in June, while potential new tariffs fueled ‘front-loaded’ orders to the US The nation’s machinery exports to the US amounted to US$7.19 billion last year, surpassing the US$6.86 billion to China to become the largest export destination for the local machinery industry, the Taiwan Association of Machinery Industry (TAMI, 台灣機械公會) said in a report on Jan. 10. It came as some manufacturers brought forward or “front-loaded” US-bound shipments as required by customers ahead of potential tariffs imposed by the new US administration, the association said. During his campaign, US president-elect Donald Trump threatened tariffs of as high as 60 percent on Chinese goods and 10 percent to 20 percent on imports from other countries.
INDUSTRY LEADER: TSMC aims to continue outperforming the industry’s growth and makes 2025 another strong growth year, chairman and CEO C.C. Wei says Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp and Apple Inc, yesterday said it aims to grow revenue by about 25 percent this year, driven by robust demand for artificial intelligence (AI) chips. That means TSMC would continue to outpace the foundry industry’s 10 percent annual growth this year based on the chipmaker’s estimate. The chipmaker expects revenue from AI-related chips to double this year, extending a three-fold increase last year. The growth would quicken over the next five years at a compound annual growth rate of 45 percent, fueled by strong demand for the high-performance computing
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