SK Hynix Up 12%, Samsung Up 9%: Why US Bonds Move Korean Chips

SK Hynix jumped 12% and Samsung Electronics gained 8.9% on Thursday, pushing South Korea's Kospi up 6.13%.

The rally didn't start with a chip headline. It started with the US bond market, which has experienced volatility in recent days. Not to mention the highly volatile Korean markets, driven by a number of factors related to AI.

The SK Hynix Buyback

First, SK Hynix disclosed plans to repurchase and cancel 40 trillion won ($28.8 billion) of its own shares. No Korean company has ever announced a buyback this large.

The move would retire about 3.3% of outstanding shares. Fewer shares outstanding lifts earnings per share and return on equity, two metrics investors watch closely.

Kiwoom Securities analyst Han Ji-young said the buyback should support the stock structurally.

"SK hynix's share buyback and cancellation could improve earnings per share (EPS) by reducing the number of shares outstanding and raise return on equity (ROE) by reducing shareholders' equity, which should provide stronger downside support for the stock price."

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