Is SKHY Still Undervalued After SK Hynix’s $29B Buyback?

SK Hynix is back in the spotlight after announcing a massive 40 trillion won share buyback and cancellation plan, worth about $28.6 billion. The company also plans to return more than 50% of its cumulative free cash flow from 2025 to 2027 to shareholders.

The announcement sends a clear message: SK Hynix believes its current market value does not fully reflect its business strength, cash-generation ability, and long-term growth potential.

At the same time, strong AI infrastructure spending continues to drive demand for high-bandwidth memory, or HBM, where SK Hynix remains a major global supplier.

The key question is no longer whether SK Hynix is benefiting from the AI boom. It is whether SKHY is still undervalued after a major rerating, or whether the market has already priced in years of future HBM growth.

Key Takeaways

• SK Hynix announced a 40 trillion won, or roughly $28.6 billion, share buyback and cancellation plan, signaling management's confidence in the company's value.
• HBM remains one of the most important growth drivers as AI chips and data centers require increasingly advanced memory.
• Buybacks can improve per-share metrics, but long-term valuation still depends on whether earnings growth can continue.
• Investors seeking USDT-based exposure can explore the WEEX SKHY/USDT Stock Spot 2.0 market. SKHY is also included in the WEEX Stock Spot 2.0 Trading Carnival.

What Does SK Hynix’s $29B Buyback Actually Mean?

SK Hynix plans to repurchase and cancel shares worth approximately 40 trillion won.

The word “cancel” matters. Some companies buy back shares and keep them as treasury stock. When shares are cancelled, however, they are permanently removed from the outstanding share count.

In simple terms:

The same amount of profit divided among fewer shares can increase earnings per share, or EPS.

A lower share count can therefore improve per-share economics for remaining shareholders. The announcement also carries a strong valuation signal. SK Hynix has said that its business competitiveness, cash-generation capability, and long-term growth potential are not fully reflected in its share price.

In other words, management is backing its view of undervaluation with a very large capital commitment.

Still, a buyback alone cannot guarantee higher stock prices. Future earnings remain the most important factor.

Why Does SK Hynix Believe It May Be Undervalued?

The strongest argument comes from the rapid improvement in SK Hynix's earnings power.

AI infrastructure spending has sharply increased demand for advanced memory. HBM, in particular, has become essential for AI accelerators and GPUs used in large data centers.

This has changed how investors view SK Hynix.

Traditionally, memory companies have been highly cyclical. A typical cycle works like this:

Memory prices rise → manufacturers increase capacity → supply catches up → prices fall → profits weaken.

HBM is different in several ways. It requires more advanced manufacturing, packaging, and customer qualification, creating higher barriers to entry.

If SK Hynix can maintain its HBM technology and supply leadership, investors may increasingly value the company not only as a traditional memory-chip producer, but also as a key supplier to the AI infrastructure industry.

That potential shift in valuation is central to the SKHY investment debate.

Is HBM Still the Main Valuation Driver for SKHY?

Yes. HBM remains one of the most important factors behind SK Hynix's current earnings and valuation outlook.

High Bandwidth Memory provides much faster data transfer than conventional memory, making it particularly useful for AI training, inference, and high-performance computing.

SK Hynix has established a leading position in the HBM market and continues to develop newer generations such as HBM4.

Two factors now matter most.

First, AI infrastructure spending must remain strong. Companies such as NVIDIA, Microsoft, Google, and Amazon continue to invest heavily in data centers and AI computing. Continued spending would support demand for advanced memory.

Second, SK Hynix must defend its technological lead. Samsung and Micron are also expanding their HBM businesses. Greater competition could eventually increase supply and put pressure on pricing and margins.

So the important question is not whether HBM is currently in demand. It is:

How long can the high-margin HBM cycle last?

Can the $29B Buyback Push SKHY Higher?

A large buyback can support valuation, but the relationship is not as simple as “bigger buyback equals higher stock price.”

The plan can help SK Hynix in three main ways.

First, cancelling shares reduces the number of outstanding shares and can increase EPS if profits remain stable.

Second, the scale of the program sends a strong signal that management believes its own shares offer attractive value.

Third, the company is increasing shareholder returns by committing more free cash flow to investors, which may help reduce the valuation discount often associated with South Korean equities.

But none of these effects can fully offset a major decline in earnings.

A better way to understand the buyback is:

It can amplify the benefits of earnings growth, but it cannot replace earnings growth.

Is SKHY Really Cheap After the AI Rally?

A stock is not automatically expensive simply because its price has risen sharply. The more useful question is whether earnings have increased faster or slower than the stock price.

If SK Hynix's profits continue growing faster than its valuation, the stock could still look relatively inexpensive even after a major rally.

That is one of the strongest arguments in favor of the undervaluation case.

However, investors already understand the importance of AI and HBM. SK Hynix has undergone a substantial AI-driven rerating, meaning part of its future growth is already reflected in the market price.

The debate has therefore changed from: “Will SK Hynix grow?” to: “Can SK Hynix grow faster than the market already expects?”

That distinction matters. Even an excellent company can experience a correction when expectations become too high.

What Could Make SK Hynix Overvalued?

The biggest risk remains the memory cycle.

HBM supply is currently tight, but SK Hynix, Samsung, and Micron are all investing in additional capacity. If supply expands faster than demand in the coming years, memory pricing and margins could weaken.

AI spending is another key risk. If major technology companies reduce data-center investment, expected HBM demand could fall.

Valuation itself also matters. When investors price in several years of strong growth, even a solid earnings report may disappoint if it falls short of very high expectations.

This is why “undervalued” should not be treated as a permanent label. It depends on whether future earnings actually meet or exceed what investors are already paying for.

SKHY Valuation: Bull, Base and Bear Cases

The $29 billion buyback is therefore only one part of the valuation story.

Ultimately, long-term valuation depends on two things: earnings growth per share and the multiple investors are willing to pay for those earnings.

How to Trade SKHY and Join WEEX Stock Spot 2.0 Rewards

For users who want exposure to SK Hynix price movements using USDT, the WEEX SKHY/USDT trading market provides access through WEEX Stock Spot 2.0.

The product supports USDT trading from 5 USDT and does not require a traditional brokerage account.

However, WEEX Stock Spot 2.0 products are price-tracking synthetic assets. Trading SKHY/USDT does not mean directly owning SK Hynix shares, and users do not receive shareholder voting rights or traditional stock dividends.

SKHY/USDT is also one of the eligible assets in the ongoing WEEX Stock Spot 2.0 Trading Carnival, running from August 31 to September 15, 2026 (UTC+8).

Eligible users can receive base rewards after reaching specified trading-volume thresholds. If a selected stock finishes among the event's Top 3 performers, the corresponding base reward can be doubled. Users with at least 1,000 USDT in eligible trading volume can also qualify to share a 30,000 USDT cash pool.

New users may additionally qualify for first-trade loss protection of up to 60 USDT in bonus funds, subject to the campaign rules.

These incentives do not guarantee trading profits, and eligibility depends on registration, trading volume, account status, and the official campaign terms.

What Should Investors Watch Next?

Four indicators are especially important: HBM4 shipment progress, HBM pricing and supply conditions, AI capital expenditure from major technology companies, and execution of the 40 trillion won buyback and cancellation plan.

If these factors remain supportive, SK Hynix may continue to justify a higher valuation.

If HBM supply begins to outpace demand or AI spending slows, even a large buyback may not fully offset weaker earnings expectations.

Conclusion: Is SKHY Still Undervalued?

SK Hynix has a credible undervaluation case. It combines a leading position in HBM, strong AI-driven earnings growth, robust cash generation, and one of the largest share buyback and cancellation programs in South Korean market history.

But investors are no longer valuing SK Hynix as an ordinary memory-chip company. Much of the AI and HBM growth story has already been recognized by the market.

That means the key question is not simply how large the buyback is.

It is whether HBM earnings can remain strong for long enough to exceed the market's already high expectations.

If they can, SK Hynix may still have room for further rerating. If the AI memory cycle slows earlier than expected, the valuation margin of safety could narrow quickly.

FAQ

1. Why is SK Hynix buying back about $29 billion of shares?

The company believes its market value does not fully reflect its business strength, cash-generation ability, and long-term growth potential. The buyback and cancellation also form part of a broader increase in shareholder returns.

2. Does a share buyback guarantee that SK Hynix stock will rise?

No. A buyback can reduce the share count and improve per-share metrics, but long-term stock performance still depends mainly on earnings, HBM demand, industry conditions, and valuation.

3. Why is SK Hynix important to the AI industry?

SK Hynix is a major supplier of HBM, a type of high-performance memory widely used with AI GPUs and other advanced computing systems.

4. Can I trade SKHY with USDT?

Yes. WEEX Stock Spot 2.0 offers an SKHY/USDT price-tracking product. It is a synthetic asset rather than direct ownership of SK Hynix shares.

5. Can SKHY participate in WEEX stock trading rewards?

Yes. SKHY/USDT is one of the eligible assets in the current WEEX Stock Spot 2.0 Trading Carnival, subject to the event's participation and trading requirements.