SK Hynix posts record Q3 2026 profit

SK Hynix reported record third-quarter revenue and operating profit as it accelerated shipments of HBM4 memory for artificial intelligence data centers, while also unveiling 34 trillion won ($24.5 billion) in new dividends and share repurchases.

The company said on Oct. 28 that third-quarter revenue reached 104.62 trillion won ($75.3 billion), up 327.9% from a year earlier and 32% from the second quarter. Operating profit rose 632.1% year on year to a record 83.33 trillion won ($60.0 billion), an increase of 38% from 60.54 trillion won in the prior quarter.

The results place SK Hynix’s earnings growth squarely in the race to supply high-bandwidth memory, or HBM, to AI computing systems. HBM4 entered mass shipments during the quarter, and the company expects the product to overtake HBM3E in both shipments and revenue during the fourth quarter.

Shares rose more than 4% at one point in early trading following the announcement.

Cash returns follow stronger memory earnings

SK Hynix proposed a 14 trillion won ($10.1 billion) cash dividend for the third quarter and authorized an additional 20 trillion won ($14.4 billion) share repurchase program. About half of the new buyback authorization, or 10 trillion won, is earmarked for cancellation, while the other half is intended for employee compensation and is excluded from the company’s shareholder-return calculation.

The quarterly dividend amounts to 20,000 won per share. SK Hynix said 10,000 won of that payout reflects stronger operating performance, while another 10,000 won is a special dividend connected to returns from its investment related to Japan’s Kioxia.

For the full year, the company expects total shareholder returns of roughly 100 trillion won ($72 billion). That includes at least 30 trillion won in cash dividends and at least 60 trillion won in buybacks and cancellations. SK Hynix also said it completed a previously announced 40 trillion won repurchase plan on Oct. 21 and plans to cancel the shares acquired under that program.

The scale of the payouts reflects the company’s sharply improved cash position. Cash and cash equivalents stood at 114.5 trillion won at the end of the quarter, up 26.5 trillion won from the end of the second quarter. Borrowings fell by 2.8 trillion won to 15.8 trillion won, leaving net cash of 98.7 trillion won ($71 billion), according to the company.

HBM4 ramps as supply agreements lock in capacity

SK Hynix said it has signed long-term supply agreements with 14 major customers, generally lasting five years. The agreements cover more than half of the company’s total production capacity for 2027 and 2028, with prices structured to move within agreed ranges as market conditions change.

Those contracts offer a clearer view of how memory suppliers are trying to manage a market shaped by AI infrastructure spending. HBM production requires advanced chip packaging and tightly coordinated supply chains, making it harder to add output rapidly than in some earlier memory cycles.

SK Hynix said it expects tight global memory supply to persist through 2030, citing manufacturing complexity and the time needed to construct and bring new fabrication plants into operation. The company plans to raise output at its M15X facility to its maximum level by year-end to expand HBM4 supply.

In DRAM, SK Hynix plans to increase the share of chips made on its sixth-generation 10-nanometer-class, or 1c, process. It also plans to expand sales of DDR5 memory and LPDDR5 SOCAMM products for AI servers. SOCAMM is a compact memory module format designed to support high-performance computing systems.

The company’s NAND strategy is also focused on data-center demand. Sales of 321-layer triple-level-cell enterprise solid-state drives rose during the quarter, according to SK Hynix. The company plans to move the 321-layer process to more than half of domestic NAND production capacity in the fourth quarter, supporting higher-capacity enterprise storage products.

Margins widen despite lower net profit from the second quarter

Third-quarter net profit came in at 39.78 trillion won ($28.6 billion), up 215.7% from a year earlier but down about 58% from 93.92 trillion won in the second quarter. SK Hynix attributed the sequential decline largely to non-operating items that lifted the prior quarter’s bottom line.

The gap between record operating profit and lower sequential net profit shows why operating earnings have become the cleaner measure of the company’s memory business momentum. Gross margin reached 86%, while operating margin rose to 80% and EBITDA margin reached 84%. Each improved by roughly three to four percentage points from the prior quarter, SK Hynix said.

Diluted earnings per share were 54,454 won ($39.20), down about 59% from the second quarter but still well above roughly 18,000 won a year earlier.

Data-center expansion increases pressure on infrastructure

SK Hynix said infrastructure investment in Korea and overseas is expected to rise as the first phase of its Yongin project begins full operations next year. The company did not provide a capital-expenditure target for the next year or updated budgets and timelines for the Yongin cluster, the Cheongju P&T7 project, or a planned advanced-packaging plant in the United States.

The infrastructure demands behind the AI memory boom extend beyond semiconductor fabs. The International Energy Agency said data centers consumed 485 terawatt-hours of electricity in 2025, underscoring the growing competition for power capacity as AI operators add computing hardware.

That demand can affect energy-intensive industries, including Bitcoin mining, where profitability depends heavily on electricity prices and access to dependable power contracts. Large AI data centers generally offer utilities long-duration demand commitments and can support new generation and transmission projects, while smaller mining operations often face more variable economics.

A Lawrence Berkeley National Laboratory study has projected that U.S. data centers could account for up to 12% of national electricity consumption within several years. The estimate illustrates why access to power, rather than chip availability alone, is becoming a constraint across digital infrastructure.

For SK Hynix, the immediate advantage lies in its ability to convert that infrastructure buildout into orders for advanced memory and enterprise storage. Its fourth-quarter outlook rests on whether HBM4 production can rise quickly enough to meet customer demand without weakening the supply discipline that has driven its margins to record levels.