Samsung Electronics’ stock on Monday saw a significant rise after the company announced a surprise buyback plan worth 10 trillion South Korean won ($7.19 billion) over the next year.
The stock surged more than 7% in Seoul, following a 7.21% increase on Friday, fueled by news of a preliminary agreement with its largest workers union, which had been on strike since July.
Samsung last share buyback was in November 2017, according to CNBC.
In its latest regulatory filing, the company announced that it will repurchase 3 trillion won worth of shares over the next three months, with those shares being canceled after the buyback.
While the repurchase of the remaining 7 trillion won worth of shares will be “authorized accordingly by the Board, which will decide on ways to enhance shareholder value, including when and how to use the treasury shares,” it added.
Samsung’s shares dropped to a four-year low on November 15, after the company issued a weak profit forecast for the third quarter and amid concerns over potential tariffs following Donald Trump’s victory in the U.S. presidential election.
The compsny has fallen behind its rival SK Hynix in the race to supply high bandwidth memory (HBM) chips, a crucial component for AI leader Nvidia, according to analysts speaking noting that “it is fair to say that Samsung has not been able to close the gap with SK Hynix on the HBM development roadmap.”
HBM (High Bandwidth Memory) is a type of dynamic random access memory (DRAM), which is commonly used in devices like laptops, workstations, and PCs. HBM offers higher bandwidth compared to traditional DRAM, making it particularly valuable for high-performance applications like AI and gaming.
South Korean media reports that SK Hynix was the first chipmaker globally to supply Nvidia with fifth-generation HBM3E chips in March.
