Samsung Electronics has announced a surprise plan to repurchase stocks worth approximately 10 trillion South Korean won ($7.19 billion) over the next year.

This unexpected move has led to a more than 7% surge in the company's shares on Monday.

The stock buyback follows a 7.21% increase on Friday, which was a result of a preliminary agreement with its largest workers union after a strike in July.

Samsung plans to repurchase 3 trillion won of shares within three months, which will be canceled, while the remaining 7 trillion won will be subject to board approval for future shareholder value enhancement.

This decision comes after Samsung's shares hit a four-year low in November due to disappointing profit guidance for the third quarter and concerns over tariffs following the U.S. presidential election.

Analysts have pointed out that Samsung is falling behind its rival SK Hynix in the development of high bandwidth memory (HBM) chips, which are crucial for AI applications.

SK Hynix recently became the first chipmaker to supply fifth-generation HBM3E chips to Nvidia.