Investment Research
The cash is
already there
Cash left after investment. Cash preserved by cutting investment.
Where is Corporate Korea’s cash now—and where does it go from here?
The cash is already there. Five paths lie ahead.
Companies usually consume more funds than they generate. Korea’s nonfinancial corporates did so in 2025 as well. In Q1 2026, however, the direction flipped, producing the largest net-lending surplus since the series began in 2009. But treating all of that cash as one pool gives the wrong read. It mixes cash left over after two semiconductor leaders increased investment with cash preserved because other companies invested less. This report tracks where the money is sitting today and which path it could take next.
The new development is not stronger earnings alone. Some companies are now generating enough cash to keep investing and still accumulate surplus cash.
Published Sep 27, 2026 · Sources checked through Sep 27 · Market and investor-flow data are as of the Sep 23 KRX regular session, the final trading day before the Chuseok holiday · Bank of Korea nonfinancial corporations, externally audited companies, KOSPI-listed companies, and the 331-company sample drawn from Korea’s 500 largest companies are different reporting universes and are not combined into a single “corporate cash total.”
From net borrower to net lender
Companies are typically net users of funds. They build factories, buy equipment and develop technology, financing part of that spending with household savings intermediated through financial markets. In 2025, Korea’s nonfinancial corporations were still net borrowers, recording KRW 34.2tn of net borrowing for the year.1
But in Q1 2026 the direction reversed. The same nonfinancial-corporate sector recorded KRW 20.8tn of net lending, meaning the sector had enough left after investment and operating expenses to increase financial assets such as deposits and bonds. It was the largest surplus since the series began in 2009—3.6 times the previous record of KRW 5.8tn in Q1 2024. Over the same period, net income across listed companies jumped from KRW 31.0tn in Q4 2025 to KRW 111.4tn in Q1 2026.1
- Who
- Korean nonfinancial companies · Especially Samsung Electronics and SK hynix
- When
- Q1 swing to a financing surplus · Liquidity growth from April through July · Buybacks in August and September
- Where
- For now: MMFs and time deposits · Share buybacks · Semiconductor-equipment investment
- What
- Where operating cash goes · Capex · Overseas investment · Returns · Acquisitions · Cash waiting
- How
- Follow operating cash → capex → residual cash → allocation, rather than adding up a single cash total
- Why
- AI-driven memory windfall profits · Lower non-semiconductor investment · Preference for liquidity amid tariff, FX and rate uncertainty
The same buildup is visible in the money-supply data. M2 held by nonfinancial companies increased month on month by KRW 16.1tn in April, KRW 30.1tn in May and KRW 45.7tn in June, when the increase reached the largest since the series began in 2003. The Bank of Korea attributed April to “inflows of deposits from semiconductor companies” and June to “greater placement of short-term surplus funds in MMFs and time deposits.”2 The July figure released on September 15 showed another KRW 20.6tn increase, indicating that balances were still rising, albeit more slowly. Household M2 fell KRW 11.6tn in the same month.5
Cash balance
Money held at a point in time · Cash and cash equivalents on a half-year report belong here.
Change in M2 · Net lending · Operating cash flow · FCF
Money that moved over a month or quarter · Do not add it to a balance-sheet stock.
How a cash surplus is created · FCF is what remains after capex
Asking “how much capex comes out of KRW 100 of FCF?” subtracts capex twice · The sequence is operating cash flow → capex → FCF → allocation.
Some companies have moved from asking how to fund investment to deciding how to allocate the cash left over.
Before applying that statement to all Korean companies, however, we first need to ask whose cash it is. That is the question for the next chapter.
The cash did not come from the same place
Operating profit for 634 KOSPI companies reached KRW 388.2tn in H1, up 254% from a year earlier. Even excluding Samsung Electronics and SK hynix, profits at the other 632 companies rose 75.6%, so the earnings recovery is not merely a semiconductor-driven effect. The picture changes when we turn to capex. Virtually all of the increase in capex came from two companies.6
The aggregate barely moved. Underneath it, two nearly equal flows moved in opposite directions.
Samsung Electronics: cash and cash equivalents + short-term financial instruments · SK hynix: cash and cash equivalents · Definitions differ.7
Cash and cash equivalents aggregated by Leaders Index · +24.8% y/y.
The two figures use different account definitions and different samples, so do not divide one by the other or calculate shares · What we can confirm is that cash is building beyond those two companies as well.
The two semiconductor companies
H1 capex KRW 51.9543tn · Cash increased · Shareholder returns expanded from August · The key is whether industry conditions and returns on investment hold up.
Other 329 companies
Capex −11.1% · Batteries −47% · Petrochemicals −38.8% · Biotech −23% · Rising cash may be defensive rather than a growth signal.
Conditions for the rest of corporate Korea are tighter than the headline suggests. Across externally audited companies, 2025 operating margin improved to 6.2%, debt ratio to 98.3%, and borrowings dependence to 27.3%. But the same dataset shows that the share of companies unable to cover interest expense from operating profit—interest coverage below 100%—hit a record 39.9% and excluding the two semiconductor companies, operating margin falls to 4.9%.8 On top of that, the Bank of Korea raised the policy rate twice in July and August, from 2.50% to 3.00%. One estimate puts the additional corporate interest burden at about KRW 3.7tn for every 25bp increase.9
More cash is not automatically a bullish signal.
First distinguish cash left after investing from cash preserved by cutting investment.
Three paths are already visible
So where is the surplus cash now? Primary data show three places: cash parked in MMFs and deposits while decisions are deferred; cash returned to shareholders through buybacks; and cash converted into semiconductor equipment. The other routes are not yet visible in the data.
Corporates accounted for 96% of the increase in MMFs · KRW deposits held by corporations: KRW 819.8tn at end-June, +KRW 75.6tn YTD · Households −KRW 24.7tn.11,12
July changes by money-market product · The statistics cannot show whether the same funds moved directly from one product to another or what their actual maturities are · What they do show is a shift away from immediately withdrawable deposits toward term deposits and managed savings products.5
Listed-company share buybacks are recorded as net buying under the KRX investor category ‘Other Corporations.’ Over the same period (Sep 1–21), foreigners were −KRW 12.81tn, individuals −KRW 16.28tn and institutions +KRW 5.91tn; the KOSPI rose from 6,820 on Aug 31 to 7,080 on Sep 23, the final trading day before the holiday (+3.8%).4,13,14
Do not treat the entire Other Corporations category as buybacks by the two companies · Reported cumulative purchases by the two through Sep 21 totaled KRW 36.4tn.
Led by semiconductor-manufacturing machinery and ships · August imports of semiconductor equipment +96.5% · KDI 2026 facility-investment forecast +7.9%.15,16
GDP facility investment rose 6.6% q/q in Q1, then 0.2% in Q2 · The level remains high, but acceleration has stopped.17
Not all of the cash has been allocated. A large pool is still on standby.
What is visible now is waiting cash, large buybacks and semiconductor investment. Everything else remains a possibility rather than a broadly established reality.
Domestic capex · Cash circulates through the supply chain
One company’s capex is another company’s revenue.
When a semiconductor company spends on factories and R&D, the money does not disappear. It becomes revenue for equipment, materials, power, cooling, construction and automation suppliers. When domestic capex strengthens, that spending can propagate into earnings across second- and third-tier suppliers.
- Large-company operating cashSemiconductor profits
- Domestic capex · R&DFabs · Cleanrooms · Equipment
- Equipment · Materials · Power · ConstructionSupplier revenue
- Supplier employment · ProfitSecond-tier supply chain
- Domestic capex · R&D againSecond round
Announced investment · Separate plans from actual spending
| Company / institution | Amount | Type | Caveat |
|---|---|---|---|
| Samsung Electronics | 2026 facility investment + R&D: at least KRW 110tn · H1 facility investment: KRW 28tn18 | Annual plan H1 execution | Facilities and R&D · Allocation between memory and foundry not disclosed · Company-reported facility-investment basis differs from the KRW 32.9603tn tangible/intangible-asset purchases used by Leaders Index in CH.02 |
| SK hynix | 2026 capex: “high-KRW-40tn range”19 | Annual guidance | Reported Yongin/Cheongju construction plans of roughly KRW 54tn span multiple years · Do not add them as investment for a single year |
| Hyundai Motor Group | 2026–2030 domestic investment KRW 125.2tn · New businesses 50.5 · R&D 38.5 · Recurring investment 36.220 | Five-year plan | Track separately from actual spending |
| Four policy-finance institutions | 2026 total KRW 252tn · At least KRW 150tn for five priority sectors21 | Supply plan | The National Growth Fund, targeting KRW 30tn a year, is separate from the KRW 150tn |
| National Growth Fund | Cumulative approvals · Jan–Sep 35 projects · KRW 18.9tn · Five additional projects worth KRW 1.0684tn approved Sep 17 (KRW 17.9tn through August)22 | Approval basis | Actual drawdowns are separate · Approval ≠ execution |
Supply plans, approvals and actual drawdowns are different numbers. To verify execution, watch purchase orders, equipment deliveries and construction progress—not announced headline totals.
Good capexRETURN > COST
- Demand
- Expansion backed by confirmed customer orders
- Return
- ROIC exceeds the cost of capital (WACC)
- Spillover
- Revenue spreads through the domestic supply chain
Bad capexPEAK BUILD
- Timing
- Built alongside competitors at the peak of the cycle
- Outcome
- Oversupply · Falling prices
- Cost
- FCF and shareholder returns are damaged
In a domestic capex upcycle, suppliers that actually win the orders can have more earnings leverage than the cash-rich conglomerates placing them.
Confirm beneficiaries through orders and equipment deliveries, not announced investment totals.
Shareholder returns · Structural shift or front-loaded cushion?
A KRW 40tn cushion does not last forever.
The fastest-changing part of capital allocation is shareholder returns. In 2025, listed companies canceled KRW 21.4tn worth of treasury shares and paid KRW 50.9tn in cash dividends. This year, SK hynix announced a roughly KRW 40tn share buyback and Samsung Electronics announced roughly KRW 30tn in Q3 dividends. Those two announcements alone are close in scale to the KRW 72.3tn of treasury-share cancellations and cash dividends recorded across all listed companies last year.23,24
For scale only · The SK hynix figure is the disclosed planned purchase value, calculated at the previous day’s close; the Samsung figure is an announced dividend amount that still requires final board approval. They differ from last year’s actual spending in both nature and confirmation stage and are not combined as one executed amount.
Estimates of remaining trading days are based on press reporting as of Sep 21 · Accounting for market closures for Chuseok (Sep 24–25), the substitute holiday for National Foundation Day (Oct 5), and Hangul Day (Oct 9), Samsung Electronics is estimated to finish in late September to early October and SK hynix in mid-October · Confirm actual completion through each company's final disclosure.4
September · Other Corporations absorbed foreign and retail selling
KOSPI monthly +3.4%13
In September, Other Corporations absorbed large amounts sold by foreigners and individuals. Market participants have interpreted the two companies' large buybacks as a flow-based floor under the index(see comments below). But the entire Other Corporations category cannot be equated with those two buybacks. The roughly KRW 1.6tn daily figure—recent purchases divided by elapsed trading days—is an implied pace, not a daily order that is guaranteed to recur. That support could weaken during October.
Samsung Electronics · 2026 shareholder returns approx. KRW 90–110tn · Broken out by confirmation status24
| Category | Amount | Confirmation timing | Status · Sep 23 |
|---|---|---|---|
| Q3 cash dividend · Includes regular dividend | Approx. KRW 30tn | Record date Sep 30 · Board decision in October | Total announced · Per-share amount not yet fixed25 |
| Remainder · Cash dividends and share purchases/cancellations | Total less KRW 30tn | Board decision in January 2027 | Method and amount undecided |
| Employee-compensation share purchase | Approx. KRW 15tn · Aug 24–Nov 21 | Board-approved | 78.4% complete as of Sep 21 · Early completion expected4 |
Execution of the 2024–2026 policy to return 50% of FCF · The “KRW 60–80tn remaining” figure calculated by the press is not a company announcement · Whether the employee-compensation purchase is included in the total was not specified in the original company announcement, so it is shown separately.
SK hynix On Aug 19, SK hynix's board approved purchases of 24.07mn shares (3.3% of shares outstanding) in the market from Aug 20 through Nov 19, with all shares to be canceled. The disclosed planned purchase amount is KRW 40.0043tn. The company also raised its 2025–2027 cumulative FCF-return framework from “up to 50%” to “at least 50%,” while simultaneously executing capex in the high-KRW-40tn range. Net cash at the end of Q2 was KRW 69.4tn. The planned purchase amount is calculated using the previous day's closing share price, so actual cash spending will vary with execution prices.26,19
FCF-linked return rule
The FCF return ratio shifts from “up to 50%” to “at least 50%” · Dividends and share cancellations become more systematic · A March 2026 Commercial Act reform requires treasury shares to be canceled within one year of acquisition · 286 cancellation decisions were disclosed across KOSPI and KOSDAQ from Mar 6 to Aug 19, versus 88 in the same period a year earlier.23
Actual buyback flow
Samsung Electronics' employee-compensation purchases are estimated to end in late September to early October; SK hynix's in mid-October. Samsung's remaining shareholder-return method will be decided by the board in January 2027. If both programs finish early in October at the current pace, could leave a gap in large-scale buyback demand before Samsung decides its remaining shareholder-return plan in January 2027. Because employee-compensation purchases are exempt from the cancellation requirement, they are also cannot be viewed as a permanent substitute for foreign buying.
The same flow through two lenses · Market participants' views27
Did the company actually execute the buyback? Were the shares retired, or later reissued for employee compensation? Does FCF still remain after capex? Does the policy survive a downturn?
Good shareholder returns distribute FCF left after high-return investment; bad shareholder returns sacrifice growth capex or add leverage simply to support the share price.
Overseas investment · Whose money is funding it?
USD 22.3bn. But whose money is funding it?
There is widespread concern that tariffs are pushing Korean corporate cash into the United States. The data are more nuanced. Outbound capital includes factories funded directly by companies, government-led strategic investment in the U.S., and financial investment routed through funds. The funding sources and economic effects are not the same.
It would be wrong to look only at the currently published data and conclude that “Korean manufacturers' cash is fleeing to the United States.” Much of the Q1 increase in U.S.-bound investment came from finance and insurance, not factories. That said, the location of the next factory can still be shaped by tariffs, local-production requirements, subsidies, proximity to customers and supply-chain security.
Taylor · Indiana · Hyundai Motor Group U.S. investment · Corporate decisions aimed at consolidated earnings and tariff avoidance.
Korea–U.S. strategic-investment track · Separate from corporate cash · Final funding structure has not yet been fully disclosed.
Direct investment by finance and insurance companies · More remittances do not necessarily mean more production facilities.
Proposed first U.S. strategic-investment project · USD 22.3bn Encinal, Texas gas-fired combined-cycle power project29,30
Korean-side advance reporting to the National Assembly was completed on Sep 22 · Encinal is the proposed first project · The U.S. final project-selection process and a formal Korea–U.S. announcement are still pending.
Based on National Assembly reporting and press coverage · Profits split 50:50 before principal and interest are recovered · Mechanism reportedly gives the Korean side priority recovery of principal and interest upon liquidation.
Long-term power-purchase agreement (PPA) still under negotiation with no binding commitment · The largest unresolved variable in project economics.
Reported candidates include returns on FX reserves, the Foreign Exchange Equalization Fund, KIC earnings, financial-institution borrowing and government-guaranteed bonds · not treated here as a finalized financing plan.
On current evidence, no · It is tracked on a separate ledger from corporate cash in this report.
According to current reporting, yes · The Korean side is expected to arrange funding · That is distinct from a loss already incurred.
No · The PPA is still being negotiated · Sale price and utilization will determine returns.
No · U.S. final selection, a formal Korea–U.S. announcement, financing and the PPA still need to be confirmed.
Hyundai Motor Group has announced both KRW 125.2tn of domestic investment for 2026–2030 and USD 26bn of U.S. investment through 2028. The two programs serve different purposes: domestic spending goes to R&D and ‘mother factories’—home bases where new products and production processes are developed first and then transferred to overseas plants—while overseas spending goes to production bases built for market access. More overseas investment does not automatically mean an equal reduction in domestic investment.20
The domestic multiplier may weaken
- Factories built overseas are not counted as investment in Korea's GDP
- Direct benefits to domestic employment and equipment suppliers may shrink
- Track the opportunity cost of FX resources and policy finance separately
- IMF · After trade tensions, weaker contribution from FDI to domestic investment explains part of the gap31
It may still help corporate growth
- Tariff avoidance · Market access · Proximity to customers
- Local subsidies and sales feed into consolidated results
- Costs · FX risk · Local borrowing · Lower domestic procurement share
- Check whether returns exceed the cost of capital
Do not count U.S. strategic investment as a corporate cash outflow.
Track corporate capital allocation on one ledger and the domestic-multiplier and FX-resource burden borne by the Korean economy on another.
M&A and idle cash · The option value of waiting
KRW 43.2tn. But it is not sitting on corporate balance sheets.
If cash is abundant, one might expect acquisitions to surge. Yet beyond a handful of large transactions, M&A activity has not broadened this year. Capital is waiting in two different places: cash on corporate balance sheets, and uncalled commitments—dry powder—at private-equity funds that can be deployed for acquisitions or financing.
End-2025 · Record high · +19.7% y/y
Control-oriented investment fell 1.7% y/y to KRW 23.7tn, while non-control investment surged 340% to KRW 4.4tn. That suggests part of the capital in the M&A market has shifted away from buying equity control and toward corporate loans and mezzanine instruments—hybrids between debt and equity such as convertible bonds.
There were a few large transactions, but acquisitions did not spread across the market. For now, M&A is not yet a major destination for corporate cash; it is better viewed as an option that can be exercised later.
Where acquisition can be the faster route
AI · Robotics · Power · Cooling · Automotive electronics · Biotech · In time-sensitive industries, acquiring capability may be faster than building it through internal R&D.
The risk that comes with too much cash
Overpaying. A company can destroy value fastest by overpaying simply because it has cash. The key is price and return, not deal size.
Holding cash is also a decision. When tariffs, wars, FX and interest rates are volatile, liquidity buys the option to wait for the next opportunity. But if a company holds low-yield cash for too long without investing or returning it, the market discounts the company accordingly. In mid-August, waiting capital in MMFs, CMAs and RPs totaled KRW 588tn.11
The option value of cash matters only if management can allocate capital well.
Cash held for the next opportunity is an option; held too long, it becomes a valuation discount.
The question is not who has the most cash, but who allocates it best
So which companies deserve attention? A large cash balance is not enough. The same increase in cash can point to very different businesses depending on how the cash was created. The six archetypes and six metrics below are a framework for separating them.
FCF and net cash rise after high-return capex · Shareholder returns continue alongside investment
Return on capex · Durability of shareholder returnsDomestic capex-led · Generates a domestic supply-chain multiplier
Actual orders · Equipment deliveriesLocalization for market access and tariff avoidance
Overseas returns · SubsidiesLow reinvestment need · Higher dividends and share cancellations
Actual cancellations · Sustainability within FCFPreserves cash by cutting capex
Is it lack of growth—or balance-sheet defense?Capex exceeds operating cash flow · External funding required
Rates · Borrowing · UtilizationA company with rising cash can be Type A or Type E · Without this distinction, “cash left after investing” and “cash preserved by investing less” collapse back into one category.
Do accounting profits convert into cash?
How much cash is required for maintenance and growth?
Does the return on investment exceed the cost of capital?
How disciplined is the return of surplus cash?
How much cash is truly discretionary?
How much comes back through the domestic supply chain?
The strongest profile is a company that still generates cash after high-return investment—and returns cash it genuinely does not need to shareholders with discipline.
The amount of cash matters less than why it appeared and where it goes next.
Three ways 2027 could unfold
This year’s cash build could feed into three very different versions of 2027: capital recirculates through supply chains; semiconductors and the rest of Corporate Korea keep diverging; or this year’s cash pile proves to be a temporary cycle peak. These are scenarios, not probability weights. Of the three, the middle case best fits the primary data available today.
CURRENT FIT · Fit with current primary data, not probability
Capital recirculates
- Semiconductor profits hold · Non-semiconductor profits broaden
- Domestic capex is executed · Supplier revenue rises
- FCF remains after capex · Dividends and share cancellations continue
Investment and balance-sheet defense diverge
- Semiconductors and some large exporters invest and return cash at the same time
- Non-semiconductors, domestic-demand businesses and capital-intensive sectors invest selectively and defend cash
- Index earnings stay strong, but market breadth remains narrow
A temporary peak
- AI / memory pricing slows · Semiconductor FCF declines
- Planned capex and overseas-investment burdens remain
- Shareholder returns shrink · Non-semiconductor capex fails to recover
- DRAM prices are still rising, but the pace is slowing · August PC DRAM contract price +4.2% · Q3 contract-price growth forecast raised to 18–23% from 15–20%, but down from 45–50% in Q2.33
- On Sep 14, “AI spending slowdown” concerns pushed Samsung Electronics down 3.28% and SK hynix down 5.13% in early trading · When demand expectations wobble, concentration can immediately turn into index volatility.34
- Counterpoint · Q3 operating-profit consensus (FnGuide aggregation as of Sep 21) was KRW 111.4tn for Samsung Electronics and KRW 78.1tn for SK hynix, up about 5% and 2% respectively from three months earlier · An FCF decline is not yet visible in the numbers.35
Facility investment +7.9% in 2026 and +7.0% in 2027 · Growth remains concentrated in semiconductors, which have relatively low employment multipliers · Private consumption improves gradually, +2.3% and +2.0%.16
Q3 operating-profit estimates rose over three months by about 5% for Samsung Electronics and 2% for SK hynix · Semiconductor cash generation is still improving.35
S&P's base case assumes strong AI demand for the next two years. In a stress scenario where big-tech companies pull back on investment, however, memory makers would see the steepest decline in EBITDA (earnings before interest, taxes, depreciation and amortization) · Rated companies still have adequate buffers, but a fundamental change in long-term AI demand would raise credit risk.36
The question is not who has the most cash, but why the cash is there.
The purpose of this research is to separate cash left after investing from cash preserved by cutting investment.
What would confirm—or invalidate—this thesis?
The conclusion of this report is a testable hypothesis, not a fixed forecast. The data released over the five weeks after publication should show whether this year’s surplus cash is becoming the start of a new investment cycle or merely a one-year phenomenon.
Corporate sector swung into net lending
Nonfinancial corporations Q1 net lending +KRW 20.8tn · Corporate M2 +KRW 45.7tn in June · +KRW 20.6tn in July.
Incremental capex came from two companies
Two companies +KRW 12.0077tn · Other 329 companies −KRW 12.0048tn.
Unallocated cash · Buybacks · Semiconductor equipment
Corporate MMFs KRW 245tn · Other Corporations +KRW 23.2tn · July facility investment +24.9% y/y.
Broad-based M&A · Overseas factories · Non-semiconductor capex
Control-oriented PEF investment −1.7% · Manufacturing FDI −5.7% · Other 329 companies CAPEX −11.1%.
Q2 Corporate Business Analysis Passed
Excluding the two semiconductor companies, all-industry sales +12.0% · Operating margin 6.2% · Construction sales rose for the first time in eight quarters · A signal of broader improvement.
July Money and Liquidity Passed
Nonfinancial companies +KRW 20.6tn · Increase continued · Demand deposits fell while time deposits and money-in-trust accounts rose.
Q2 outward direct-investment trends
Not published as of Sep 27 · Scheduled for release on Sep 29 · Watch whether manufacturing outward FDI turns higher and establish the private-sector overseas-investment baseline before the U.S. strategic-investment program.
August Industrial Activity
Whether August's +96.5% increase in semiconductor-equipment imports feeds through to the facility-investment index.
Q3 dividend record date
Record date for Q3 dividend entitlement · Details of the approx. KRW 30tn dividend plan are finalized by the board in October.
Possible completion window for Samsung Electronics employee-compensation purchases
78.4% complete as of Sep 21 · Based on recent execution pace · The final company filing will confirm completion.
Q3 preliminary results
Samsung Electronics Q3 operating-profit consensus KRW 111.4tn (FnGuide, as of Sep 21) · Test whether semiconductor FCF is holding.
Q2 Flow of Funds Most important
Whether the Q1 nonfinancial-corporate surplus of KRW 20.8tn persisted.
Possible completion window for SK hynix buyback
61.3% complete as of Sep 21 · Based on recent pace · Original deadline Nov 19 · Watch whether foreigners return after Other Corporations flow fades.
Board meeting · Q3 dividend finalized
The board will finalize the details of the roughly KRW 30tn amount.
Decision on remaining shareholder-return method
The remainder after the Q3 dividend · Whether buybacks restart · If both programs finish early, there may be a gap in large-scale buyback demand before this decision.
UPDATE PLAN · Briefly revisit only the core thesis after the Q2 Flow of Funds release on Oct 7.
The same KRW 1tn means something different depending on where it goes. Invested in a high-return factory or technology, it can seed future growth. Used to retire undervalued shares, it returns value to shareholders. Sent overseas to avoid tariffs, it weakens the domestic multiplier but expands the company's market. Left unused, it remains both an option and a valuation discount.
The question is not which company earns the most money. It is which company reinvests what it earns at the highest returns—and returns what it does not need with the most discipline.
And one more question: when the buybacks end, who fills the gap?
Glossary · 12 terms for first-time readersExpand +Collapse −
- Net lending · Net borrowing
- In the Bank of Korea's Flow of Funds framework, net lending (+) is what a sector has left to acquire financial assets after using its income and borrowing; net borrowing (−) is the funding gap it must finance externally.
- M2 (broad money)
- Money that can be spent immediately or converted to cash easily, such as cash, deposits and MMFs. In this research, the focus is the portion held by nonfinancial companies.
- Flow · Stock
- A flow is the amount that moves during a month or quarter; a stock is the amount accumulated at a specific date. Do not add them together.
- Operating cash flow · FCF
- Operating cash flow is cash actually generated by operations. Free cash flow (FCF) is what remains after capex. Dividends, buybacks and acquisitions are funded from FCF.
- ROIC · WACC
- Return on invested capital and weighted average cost of capital. Investment creates value only when ROIC exceeds WACC.
- Other Corporations
- A Korea Exchange investor category for ordinary nonfinancial corporations. Listed-company treasury-share purchases are recorded here.
- PEF uncalled commitments (dry powder)
- Capital committed to private-equity funds but not yet called or invested.
- Mezzanine
- Hybrid investments between debt and equity, such as convertible bonds and bonds with warrants.
- PPA
- Power purchase agreement. A long-term contract that specifies who will buy a power plant's output and at what price.
- EBITDA
- Earnings before interest, taxes, depreciation and amortization. Used here as a rough gauge of the cash earnings generated by the business.
- P/E (PER)
- Share price divided by earnings per share. It shows how much the market is willing to pay for a given amount of earnings.
- Multiplier
- The additional domestic economic activity created as KRW 1 of investment passes through supply chains and employment.
Source ledger · Evidence behind the figures Expand +Collapse −
- 01Bank of Korea · Bank of Korea, “Flow of Funds, Q1 2026 (Preliminary),” 2026.07.07 · Nonfinancial corporations net lending KRW 20.8tn · Full-year 2025 net borrowing KRW 34.2tn (2026.04.09) · 2025 full-year release · Q1 coverage ↑ Main text
- 02Bank of Korea · Bank of Korea, “Money and Liquidity, June 2026,” 2026.08.14 · M2 KRW 4,213.0tn · Nonfinancial companies +KRW 45.7tn · “April 2026,” 2026.06.16 · April release · June coverage ↑ Main text
- 03Leaders Index · 331 of Korea's 500 largest companies with comparable half-year data · H1 2026 capex, cash-equivalent assets and operating profit · Two-company capex +KRW 12.0077tn · Other 329 companies −KRW 12.0048tn · Total +KRW 2.9bn · 2026.08.25 · Coverage ↑ Main text
- 04Korea Exchange data · New Daily · 2026.09.23 · KOSPI net flows over 15 September trading days (Sep 1–21): Other Corporations +KRW 23.1881tn · Institutions +KRW 5.9079tn · Foreigners −KRW 12.8137tn · Individuals −KRW 16.2822tn · Samsung Electronics employee-compensation treasury-share purchases 41.80mn shares · KRW 10.85tn · 78.44% · SK hynix 14.75mn shares · KRW 25.5tn · 61.28% · Two-company total KRW 36.3656tn · Coverage ↑ Main text
- 05Bank of Korea · Bank of Korea, “Money and Liquidity, July 2026,” 2026.09.15 · Average M2 balance KRW 4,225.6tn · +KRW 12.7tn m/m · Nonfinancial companies +KRW 20.6tn · Households −KRW 11.6tn · Time deposits/savings under two years +KRW 27.3tn · Money-in-trust accounts +KRW 11.4tn · Demand-type savings deposits −KRW 27.0tn · Coverage ↑ Main text
- 06Korea Exchange · H1 2026 earnings results for 634 KOSPI companies · Coverage ↑ Main text
- 07Samsung Electronics · SK hynix half-year reports · Cash-equivalent assets at end-June 2026 · Samsung Electronics combines cash and cash equivalents with short-term financial instruments · Coverage · Net-cash calculation coverage ↑ Main text
- 08Bank of Korea · Bank of Korea, “Corporate Business Analysis 2025 (Flash),” 2026.06.10 · “Corporate Business Analysis, Q1 2026,” 2026.06.23 · Externally audited companies · Original release ↑ Main text
- 09Bank of Korea · Bank of Korea, “Monetary Policy Report,” 2026.09.10 · Policy rate raised twice in July and August, 2.50%→3.00% · “Financial Stability Report,” 2026.09.22 · A 25bp policy-rate increase estimated to raise corporate interest burden by about KRW 3.7tn and household burden by KRW 3.3tn · Monetary Policy Report · Financial Stability Report coverage ↑ Main text
- 10Bank of Korea · Bank of Korea, “Corporate Business Analysis, Q2 2026,” 2026.09.09 · All-industry sales growth 26.7% · Operating margin 16.9% · Excluding Samsung Electronics and SK hynix: all-industry sales +12.0% · Operating margin 6.2% · Manufacturing sales +14.0% · Operating margin 7.2% · Construction sales increased for the first time in eight quarters · Debt ratio 84.5% · Coverage · Coverage ↑ Main text
- 11Korea Financial Investment Association · Corporate MMF balance (mid-August) · Waiting capital in MMFs, CMAs, RPs and similar products totaled KRW 588tn in mid-August · Hankook Ilbo 2026.08.19 citing Financial News 2026.08.17 · Weekly September MMF balances fluctuate heavily by reference date and are not used as an updated figure · Article · Article ↑ Main text
- 12Bank of Korea ECOS · KRW deposits of companies and households at deposit-taking banks, end-June 2026 · Cited by Seoul Economic Daily, 2026.08.20 · Article ↑ Main text
- 13Korea Exchange · KOSPI investor net flows for August 2026 · Monthly index return · Coverage ↑ Main text
- 14MoneyToday · KOSPI close: 6,820.02 on 2026.08.31 · 7,080.92 on 2026.09.23, the final trading day before the Chuseok holiday · Aug 31 · Sep 23 ↑ Main text
- 15Statistics Korea · Statistics Korea, “Industrial Activity, July 2026,” 2026.08.31 · Facility investment +7.5% m/m · +24.9% y/y · Official release date for August industrial activity: 2026.09.30 · July coverage · Official release calendar ↑ Main text
- 16Korea Development Institute · KDI, August 2026 Economic Outlook Revision (Aug 19) · Facility investment +7.9% in 2026 · +7.0% in 2027 · Private consumption +2.3% · +2.0% · “Growth is concentrated in semiconductors, which have relatively low employment-inducing effects” · Korea Policy Briefing · “September Economic Trends,” 2026.09.07 · August semiconductor-equipment imports +96.5% · Economic Outlook · September Economic Trends coverage ↑ Main text ↑ CH.09
- 17Bank of Korea · Bank of Korea, “National Income, Q1 2026 (Preliminary)” · Facility investment +6.6% q/q · “National Income, Q2 2026 (Preliminary),” 2026.09.08 · Facility investment +0.2% q/q · Intellectual-property-product investment +3.4% · Q1 release · Q2 coverage ↑ Main text
- 18Samsung Electronics · Samsung Electronics, Value Enhancement Plan, 2026.03.19 · 2026 facility investment + R&D at least KRW 110tn · Q2 earnings conference call, 2026.07.30 · Disclosure coverage · Full conference-call transcript ↑ Main text
- 19SK hynix · SK hynix Q2 2026 earnings conference call, 2026.07.29 · Cash-equivalent assets KRW 88tn · Net cash KRW 69.4tn · Capex in the high-KRW-40tn range · Full conference-call transcript ↑ Main text
- 20Hyundai Motor Group · 2026–2030 domestic investment KRW 125.2tn · Original release ↑ Main text
- 21Financial Services Commission · “Of KRW 252tn in 2026 policy finance, KRW 150tn to be concentrated in five priority sectors,” 2025.12.24 · Original release ↑ Main text
- 22Financial Services Commission · National Growth Fund Investment Committee · Cumulative approvals KRW 17.9tn as of 2026.08.27 · Five additional projects worth KRW 1.0684tn approved 2026.09.17 · Jan–Sep total: 35 projects, KRW 18.9tn · Because project-count definitions vary across announcements, comparisons use amounts · Aug 27 · Sep 17 ↑ Main text
- 23Korea Exchange · Ministry of Justice · Financial News · 2025 listed-company treasury-share acquisitions KRW 20.1tn · Cancellations KRW 21.4tn · Cash dividends KRW 50.9tn (Value-Up White Paper) · Mandatory treasury-share cancellation took effect 2026.03.06 · 286 cancellation decisions disclosed across KOSPI and KOSDAQ from Mar 6 to Aug 19 · Ministry of Justice guide · Coverage ↑ Main text
- 24Samsung Electronics Newsroom · “Largest-ever shareholder returns · Approx. KRW 90–110tn in 2026,” 2026.08.21 · Original release ↑ Main text
- 25Seoul Economic TV · 2026.09.23 · Samsung Electronics Q3 dividend record date Sep 30 · Dividend finalized by the board in October · Market estimates of per-share dividend are not used in the main text · Coverage ↑ Main text
- 26SK hynix · SK hynix treasury-share acquisition decision, 2026.08.19 · 24.07mn shares · Planned purchase amount KRW 40.0043tn based on the previous day's close · Actual cash outlay varies with execution price · All shares to be canceled · Coverage ↑ Main text
- 27Market-participant comments · Jae-won Lee, Yuanta Securities Korea (Hankook Ilbo 2026.08.26) · Jin-hyuk Kang, Shinhan Securities (Korea Times 2026.09.01 · Financial News 2026.09.21) · Sang-hyun Park, iM Securities (Daegu Ilbo 2026.09.01) · Hankook Ilbo · Korea Times · Financial News · Daegu Ilbo ↑ Main text
- 28Ministry of Economy and Finance · “Outward Direct Investment Trends, Q1 2026,” 2026.06.30 · “Full-year 2025,” 2026.03.27 · Korea Eximbank investment basis · Q2 release not published as of Sep 27; the ministry's weekly schedule lists Sep 29 as the release date · Weekly schedule · Notice board · Q1 coverage ↑ Main text
- 29Ministry of Trade, Industry and Energy · Korea Policy Briefing · Korea-U.S. Strategic Investment MOU, 2025.11.14 · Special Act on Korea-U.S. Strategic Investment effective 2026.06.18 · Coverage of increased funding notification for the first project, 2026.08.28 · MOU · Special Act · Funding-increase coverage ↑ Main text
- 30Ministry of Trade, Industry and Energy report to the National Assembly · Major press coverage · 2026.09.22–23 · Proposed first U.S. strategic-investment project: USD 22.3bn Encinal, Texas gas-fired combined-cycle power project · 6.3GW (1.4GW gas turbines + 4.9GW combined cycle) · Funding arranged by the Korean side · Profits split 50:50 before principal and interest recovery · Priority recovery mechanism for Korean principal and interest upon liquidation · Long-term PPA under negotiation · MOU signing date and final financing structure not yet fixed · Yonhap News Agency · Profitability / PPA coverage · MoneyToday · Seoul Economic Daily · PPA · Equity / funding structure · Korea Economic Daily · Planned first remittance approx. USD 2.2bn · On Sep 27, the ministry said Korean-side procedures were effectively complete while the U.S. side was still going through internal decision-making, including an investment-committee recommendation; it said no new issue had emerged · Financial News ↑ Main text
- 31IMF · Republic of Korea 2025 Article IV Staff Report · 2025.11 · Original release ↑ Main text
- 32Financial Supervisory Service · Korea Securities Depository · “2025 Institutional Private Equity Fund Operations,” 2026.06.17 · Committed capital KRW 167.5tn · Capital called KRW 124.3tn · Uncalled KRW 43.2tn · Of KRW 4.4tn in non-control strategies, corporate loans KRW 1.4tn and mezzanine KRW 1.2tn, about 60% combined · H1 2026 listed-company M&A: 75 companies · Appraisal-rights payouts KRW 5.4bn (−82.9%) · PEF coverage · M&A coverage ↑ Main text
- 33Asia Economy · TrendForce · 2026.09.01 · August fixed contract price for mainstream PC DRAM USD 25 · +4.2% m/m · Q3 contract-price growth forecast raised from 15–20% to 18–23% · Slower than Q2's 45–50% · Coverage ↑ Main text
- 34Korea Economic Daily · 2026.09.14 · “AI spending slowdown” concerns emerge · Early trading: Samsung Electronics −3.28% · SK hynix −5.13% (as of 9:11 a.m.) · Coverage ↑ Main text
- 35BetaNews · Citing FnGuide aggregation · 2026.09.27 · Q3 operating-profit consensus (as of Sep 21; companies covered by forecasts from at least three brokerages; FnGuide raw data not held): Samsung Electronics KRW 111.3772tn (KRW 105.9030tn three months earlier · +5%) · SK hynix KRW 78.1291tn (KRW 76.9134tn three months earlier · +2%) · Coverage · Multiple outlets reported the same aggregation that day · Newsway ↑ Main text ↑ Page 09
- 36S&P Global Ratings · S&P Global Ratings, “If AI Spending Wanes, Which Asia-Pacific Tech Firms Would Be Most Resilient?”, 2026.09.16 · Base case assumes strong AI value-chain demand for the next two years · Stress tests two slowdown scenarios: weaker hyperscaler investment appetite and physical bottlenecks in power grids / sites · Memory companies show the largest EBITDA decline under the weaker-investment scenario · Original release · Supporting source · TNGlobal 2026.09.17 · Digital Today ↑ Main text
This research explains fund flows and capital allocation in Korea's corporate sector · It is not a recommendation to buy or sell any security or asset · Bank of Korea nonfinancial corporations, externally audited companies, KOSPI-listed companies and samples of Korea's 500 largest companies are different populations and are not aggregated · Plans vs execution, approvals vs drawdowns, and stocks vs period flows are shown separately · Remaining trading days and estimated completion dates are based on press reporting · Figures labeled “calculation” are simple arithmetic based on published data · Sources checked through Sep 27, 2026; market and investor-flow data are as of Sep 23, the final trading day before the Chuseok holiday · Published statistics may be revised later.