By Lee Dong-in and Lee Eun-joo
Just a day after reporting a record high earnings for the second quarter, South Korea’s second-largest memory chipmaker SK Hynix Inc. announced a 1.8 trillion won ($1.6 billion) share buyback with a plan to build a new chip factory showing its confidence about its business.
SK Hynix said in a regulatory filing on Friday that it will buy back 22 million common stocks worth total 1.83 trillion won based on Thursday’s closing price of 83,100 won per share. The total amount of shares for the company’s buyback plan would change depending on the stock price change, it said. SK Hynix has no plan to cancel the shares for at least six months, it added.
SK Hynix explained that it has decided to buy back treasury shares to keep its share value stable. Industry insiders noted that SK Hynix’s move is a show of its confidence towards the steady growth of the chip industry and the company’s business.
SK Hynix also decided to spend 3.5 trillion won to build a new semiconductor plant in its Incheon headquarters in a preemptive move to stay competitive and lead the market. Its investment plan comes at a time when prices of some memory chips are falling rapidly due to oversupply and slower sales to the smartphone industry.
The company aims to complete building the new plant on a 53,000 square meter area by October 2020 after commencing the construction in the end of this year.
The plant will have an exclusive space for next-generation exposure extreme ultraviolet wavelength (EUV) equipment, the company boasted. Considering that cutting-edge facilities will be added after the completion of the factory, the company’s total investment would jump to total 15 trillion won.