Samsung’s $1.7B Stock Buyback: A Bold Move to Pay Staff and Execs

Samsung just dropped a financial bomb—and it's aimed squarely at its own balance sheet. The tech giant announced plans to purchase a staggering $1.7 billion worth of its own shares. Not for a rainy day fund or to please activist investors. This capital is earmarked for one purpose: compensating its workforce and top brass.

The Mechanics of the Move

Forget traditional cash bonuses or salary hikes. Samsung is opting for a more equity-heavy compensation strategy. By buying back its own stock from the open market, the company effectively reduces the number of shares in circulation. Those repurchased shares then enter the corporate treasury, becoming a currency for employee stock ownership plans (ESOPs) and executive incentive programs.

Why This Matters Now

In an era where talent wars are fiercer than ever, locking in key personnel with long-term equity incentives is a classic play. It aligns employee fortunes directly with shareholder value—at least in theory. The move signals confidence from the boardroom; they're willing to deploy capital not on flashy acquisitions, but on the people driving the daily grind.

The Finance Crowd's Cynical Take

Let's be real—this is also a masterclass in financial optics. A buyback props up earnings per share (EPS) by shrinking the denominator, a trick every CFO loves. It's a way to return value while avoiding the permanence of a dividend hike. One might call it efficient capital management. A cynic would call it financial engineering 101, dressing up compensation in shareholder-friendly wrapping paper.

The final word? Samsung is betting big on itself, using its stock as the ultimate employee retention tool. Whether this $1.7B gamble pays off in innovation and loyalty—or just becomes a line item on the next proxy statement—remains to be seen.

Foundry business shows signs of recovery

Last week, Jun Young-hyun, who serves as co-CEO and oversees Samsung’s chip operations, said new contracts with important customers have positioned the company’s foundry division for major growth. The foundry business, which makes chips designed by other companies, has been losing money but appears ready to turn around. As reported by Cryptopolitan previously, Samsung signed a massive $16.5 billion agreement with Tesla back in July.

Jun also shared positive feedback about Samsung’s newest memory chips in his New Year message to staff. He said customers have been impressed with the company’s HBM4 chips, which are high-bandwidth memory products used in advanced computing.

Some customers even told Samsung directly that “Samsung is back,” according to Jun’s remarks that Reuters reviewed. He added that the company still needs to keep improving to stay competitive.

Back in October, Samsung announced it was in serious talks to provide these HBM4 chips to Nvidia, the American company that dominates artificial intelligence technology. Samsung has been racing to catch up with competitors like SK Hynix in the AI chip market.

SK Hynix warns of tougher competition ahead

Meanwhile, Kwak Noh-Jung, who runs SK Hynix, spoke about his company’s situation in his own New Year address. He said SK Hynix benefited because demand for AI chips grew faster than anyone expected.

However, he warned that competition is getting fiercer. What used to be a pleasant surprise is now just normal business, and 2026 will be harder than 2025. He stressed the need for bigger investments and more preparation for what lies ahead.

Numbers from Counterpoint Research show SK Hynix controlled 53% of the HBM market during the third quarter of 2025. Samsung held 35% while Micron had 11%.

Both companies saw their stock prices jump on the first trading day of the new year. Samsung shares climbed 7.2% while SK Hynix ROSE 4%. Both hit record highs and performed better than the broader KOSPI index, which gained 2.3%.

TM Roh, Samsung’s other co-CEO who manages the divisions that make phones, televisions and home appliances, warned about challenges ahead. He said 2026 will likely bring more uncertainty and risk because component prices are rising and countries are putting up trade barriers.

To handle these problems, Roh said Samsung will spread out its supply chain and improve how it operates globally to deal with sourcing issues, pricing pressure and tariff threats while keeping its competitive edge.

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