SK Hynix Posts Record 83.3 Trillion Won Operating Profit

SEOUL, Oct. 28 — SKSK hynix, the South Korean memory maker, reported 83.3 trillion won of operating profit for the third quarter on Wednesday, a record, on revenue of 104.6 trillion won, an operating margin of 80 percent. It was the first quarter in the company’s history with more than 100 trillion won of revenue.In DollarsAt 1,337.7 won to the dollar, the rate in Seoul at 3:30 p.m. on Wednesday as Yonhap reported it, revenue was about $78.2 billion, operating profit about $62.3 billion and net profit about $29.7 billion.

It said long-term agreements with 14 major customers already cover more than half of its production capacity for 2027 and 2028, and that it expects demand for memory to exceed supply through 2030. Seoul’s Kospi rose 6.63 percent, to 6,012.44, its first close above 6,000 in 10 trading days, Yonhap reported.

The figures show what the build-out of artificial intelligence is worth to one of the companies that make its memory. SK hynix, which supplies high-bandwidth memory, or HBM, to Nvidia, Yonhap noted, kept nearly 80 won of operating profit from every 100 won of sales. The buyers of AI hardware pay for that margin: on its call, SK hynix said customers were asking for more than twice the HBM it can supply, Yonhap reported. Its shareholders gain, with about 100 trillion won to be returned to them for 2026.

By the company’s preliminary figures, operating profit rose 38 percent from the second quarter’s 60.5 trillion won and 632 percent from 11.4 trillion won a year earlier. It beat the consensus of analysts’ forecasts compiled by Yonhap Infomax, 76.26 trillion won, by 9.3 percent, Yonhap reported. In one quarter SK hynix took in more revenue than in all of 2025, when it reported 97.1 trillion won.

Net profit was 39.8 trillion won, 58 percent less than in the second quarter. That quarter’s 93.9 trillion won included 63.3 trillion won of gains from the sale and revaluation of investment assets, largely its stake in Kioxia, the Japanese flash-memory maker, ANI reported in July, citing The Korea Herald. In the third quarter, net non-operating expenses came to 32.6 trillion won, including 11.6 trillion won of foreign-exchange-related losses from a stronger won, Yonhap reported.KioxiaSK hynix invested in Kioxia through a consortium led by Bain Capital, Yonhap reported. Kioxia’s shares rose 13.76 percent in Tokyo on Wednesday, to 14,340 yen.

DRAM results were driven by a significant increase in sales of server DDR5, the company said, “while HBM4 shipments began in earnest.” It expects HBM4 to overtake HBM3E in both shipments and revenue in the fourth quarter. Supply, it said, “is not keeping pace with the growth of the market,” because leading-edge processes are technically difficult and new factories take a long time to build.

The Contracts

SK hynix said it has signed long-term agreements with 14 major customers, “including leading global cloud service providers,” up from around 10 in July, and is discussing with a number of customers extending the terms, which are typically five years. The prices are not fixed: the agreements carry “a mechanism that reflects market conditions within a price range agreed upon with customers.”

“The customer trust built through our technological competitiveness is leading to long-term contracts, and our business structure is transforming into one with earnings stability and mid-to-long term demand visibility,” Kwak Noh-Jung, the chief executive, said in the company’s release.

The customer trust built through our technological competitiveness is leading to long-term contracts, and our business structure is transforming into one with earnings stability and mid-to-long term demand visibility.

On its call the company went further. “Virtually all of our DRAM and HBM production capacity for the next three years through 2029 has already been sold out,” SK hynix said, in Yonhap’s English report, which did not name the speaker. That reckoning combines volumes already secured under long-term agreements with demand still under detailed discussion with customers, the company said, according to Yonhap. For HBM, it expects “high profitability far exceeding the peaks of past cycles” to be sustainable, by Yonhap’s Korean account, in Daily Cortex’s translation.

Asked on the call about the risk of overproduction, SK hynix said that in judging demand it looks beyond the capital spending and forecasts its customers present, checking “customers’ financial soundness and funding capacity, and the readiness of the main supply chain,” Yonhap reported, again in Daily Cortex’s translation.

It will spend more. Investment is “expected to increase significantly” next year, the release said, as the first phase of its Yongin site enters full-scale operation; it gave no figure, and said it would adjust the scale and timing flexibly. On the call it said it would speed up construction of the buildings at new fabs, including the Yongin cluster and M17, but build their clean rooms in phases, matching equipment and output to demand, Yonhap reported.

The Returns

For 2026, SK hynix plans to return about 100 trillion won to shareholders: 30 trillion won or more in cash dividends, and 60 trillion won or more in share buybacks and cancellations, including the 40 trillion won buyback it completed last week.Last YearFor 2025, SK hynix set its dividends at 2.1 trillion won in all and said in January that it would cancel 15.3 million treasury shares, worth about 12.2 trillion won at the time: together, about one-seventh of this year’s plan. It is to cancel the 23,693,272 shares from that buyback on Nov. 5.

The board on Wednesday approved a third-quarter dividend of 20,000 won a share, or 14 trillion won: 10,000 won reflecting improved earnings and a 10,000-won special dividend sharing the gains from Kioxia, most of which the company has decided to return to shareholders. It also approved a 20 trillion won buyback. Shares worth 10 trillion won will be cancelled; the remaining roughly 10 trillion won “will be used for employee compensation and is not included in the shareholder return total.” The buyback begins on Thursday and runs for three months, and the dividend goes to shareholders of record on Nov. 30, Yonhap reported.

The company has also dropped its review of a public offering for Solidigm, its American subsidiary, which Mr. Kwak said had been meant to raise outside capital to expand Solidigm’s production facilities and lighten SK hynix’s own investment burden. “However, after carefully considering recent financial market conditions and other factors, we concluded that proceeding at this time would not be the best way to achieve the originally anticipated outcome,” he said in the release. The decision, announced on Friday, came amid strong shareholder opposition and regulatory scrutiny, Yonhap reported.

The Market

SK hynix closed at 1,487,000 won, up 10.89 percent and its highest close since Oct. 12. Samsung Electronics rose 9.01 percent, to 242,000 won, on expectations for the detailed results and shareholder-return plans it announces on Thursday, Yonhap reported. For the second session in a row, the exchange suspended program buy orders for five minutes, shortly before 11 a.m., Yonhap reported.The SidecarThe Korea Exchange’s buy-side “sidecar” is triggered when Kospi 200 futures rise at least 5 percent and stay there for at least a minute, Yonhap explained. Foreign investors bought a net 815.83 billion won of shares and institutions 960.79 billion won, while individuals sold a net 1.8 trillion won, by Yonhap’s count.

“SK hynix demonstrated that strong demand for AI chips can translate into solid operating profits and shareholder returns, easing concerns about the sustainability of the AI-driven rally and a potential peak in the memory chip cycle,” Lee Jae-won, an analyst at Yuanta Securities, said, as quoted by Yonhap. In Tokyo, the chip-equipment makers Tokyo Electron and Advantest rose 4.42 percent and 3.16 percent.

The doubt has not gone. Even after Wednesday’s gain, SK hynix’s shares closed 49.1 percent below their record close of 2,919,000 won, on June 22, and the Kospi 34.0 percent below its own, 9,114.55, the same day. On July 29, when SK hynix reported a record second quarter, its shares fell 9.6 percent. And on Sunday, Goldman Sachs strategists wrote that valuations in South Korea’s memory-chip sector implied a roughly 65 percent decline in 2027 earnings, CNBC reported; Goldman judged the shares overly discounted and kept its overweight stance on Korean equities.

Samsung Electronics, which guided on Oct. 8 to about 107.4 trillion won of operating profit for the quarter, holds its results call at 10 a.m. Thursday in Seoul, 9 p.m. Wednesday in New York. Alphabet and Microsoft also report their quarters on Wednesday. Investors who buy SK hynix by Nov. 26 and hold the shares through that day qualify for its 20,000-won dividend, Yonhap reported.