Samsung Electronics collects $4.3 bn in dividends from display unit

Samsung Electronics Co., the world’s largest memory chipmaker, is slated to receive about 5.64 trillion won ($4.3 billion) worth of dividends from its subsidiary Samsung Display Co. to fund its semiconductor production facilities, industry insiders said on Thursday.

At its general shareholders meeting on March 19, Samsung Display decided to distribute a 6.65 trillion dividend at a 119.4% payout ratio, sources said. It is the first time that Samsung Display has decided on a dividend payout since it spun off from the chipmaker in 2012.

Samsung Electronics holds an 84.8% stake in the display maker. Secondary battery maker Samsung SDI Co., which owns a 15.2% stake, will receive 1.01 trillion won in dividends.

The chipmaker will use the proceeds for its capital expenditure as it pours more than 5 billion won in domestic semiconductor production per year.

The Korean headquarters of Samsung Electronics posted 6.11 trillion won in cash equivalents on an unconsolidated basis and 91.77 trillion won on a consolidated basis as of the end of 2023. Samsung Display’s cash equivalents were 32.79 trillion won on a consolidated basis as of end-2023.

To increase funding for its semiconductor plants, the Korean headquarters of Samsung Electronics collected around 29 trillion won of dividends from its overseas affiliates and took out a 20 trillion won loan from Samsung Display last year.

There are expectations that the chipmaker will issue corporate bonds this year.  

“Samsung Electronics considered issuing bonds last year as its operating profit dropped 16% on-year to 43.48 trillion won in 2023. But the company scrapped the plan as it collected dividends from the overseas units,” an investment banking source said.

Write to Ik-Hwan Kim at lovepen@hankyung.com
Jihyun Kim edited this article.