SK hynix has reported record quarterly revenue above 100 trillion won for the first time, while outlining long-term supply commitments that place more than half of its 2027 and 2028 production capacity under contract with 14 core customers. The combination of surging high-bandwidth memory sales, sharply rising prices and locked-in capacity points to a memory market increasingly shaped by AI server demand rather than consumer electronics cycles.
The South Korean chipmaker posted fiscal third-quarter revenue of 104.62 trillion won, or about $78.32 billion, and operating profit of 83.33 trillion won, about $62.38 billion. Operating profit increased 632.1% from a year earlier, producing an operating margin of roughly 80%, four percentage points higher than in the previous quarter.
Shares in SK hynix rose 10.14% to 1,477,000 won in Korea by 12:35 p.m. local time on Oct. 28 following the release. Memory-related stocks and semiconductor equipment companies also traded higher across Asia, while related names gained in U.S. after-hours activity.
HBM4 begins to overtake HBM3E
The company’s earnings were driven by higher prices across both advanced and conventional memory products. SK hynix said average selling prices for DRAM rose about 20% from the previous quarter, while NAND prices increased about 25%.
Its more advanced HBM4 memory is expected to exceed HBM3E in both shipment volume and revenue during the fourth quarter, SK hynix said. HBM, or high-bandwidth memory, is a stacked type of DRAM designed to move large amounts of data quickly and is widely used alongside AI processors in data centers.
That product transition gives SK hynix a route to sustain high margins even as output expands. HBM4 carries higher prices than previous generations, while AI server builders need large memory configurations to run and train increasingly complex models. The company’s figures suggest that the mix of products sold, not only the number of chips shipped, is driving the earnings surge.
SK hynix forecast that tight memory supply could persist through 2030. It said demand is no longer limited to the largest cloud computing groups, pointing to growing orders from sovereign buyers and enterprises, as well as future applications in autonomous driving and embodied AI.
Multi-year contracts cover over half of future capacity
SK hynix said it has signed long-term supply agreements, generally lasting five years, with 14 core customers. The contracted volumes cover more than 50% of its total production capacity for 2027 and 2028, according to the company.
The contracts include pricing that can adjust with market conditions. That structure gives SK hynix more visibility over future demand than standard short-term memory purchasing agreements, while allowing it to capture part of any continued increase in market prices.
For companies that operate large computing networks, including AI infrastructure providers, cloud platforms and data-heavy blockchain businesses, the agreements could make supply planning more difficult outside the group of contracted customers. Memory is one of several components required for high-performance server deployments, alongside processors, networking hardware, storage and power systems. When memory supply is reserved years ahead, data-center expansion plans can face higher costs or longer procurement timelines.
The company also acknowledged that the shift in manufacturing capacity toward servers is already creating pressure elsewhere. Rising memory prices and greater allocation of supply to server products have raised costs for PC and smartphone makers, SK hynix said, with consumer-device demand already being constrained.
Net income misses estimate after non-operating charges
Net profit reached 39.78 trillion won, or about $29.78 billion, up 216% from a year earlier. The result was down 58% from the prior quarter and below a market estimate of 60.73 trillion won.
SK hynix attributed the difference largely to non-operating factors rather than a deterioration in its core chip business. These included tax accruals related to gains on its investment in Kioxia, foreign-exchange effects, and accounting impacts connected to large-scale share repurchases and cancellations.
The contrast between record operating profit and a weaker-than-expected net-profit figure makes the quarter unusually dependent on how the results are read. Core memory sales and pricing strengthened, while items below the operating line reduced the final earnings number. The operating margin, cash position and capacity commitments provide a clearer view of the company’s current business momentum than net income alone.
Cash pile supports dividends and buybacks
SK hynix ended the quarter with 114.5 trillion won in cash and cash equivalents, up 26.5 trillion won from the previous quarter. Borrowings fell by 2.8 trillion won to 15.8 trillion won, lifting net cash to 98.7 trillion won, or about $78.39 billion.
The company paired the earnings release with a 2026 shareholder-return plan totaling around 100 trillion won, about $74.86 billion. More than 30 trillion won is earmarked for cash dividends and more than 60 trillion won for share repurchases and cancellations.
Its third-quarter dividend was set at 20,000 won per share, including a 10,000 won special dividend. SK hynix said it completed a 40 trillion won buyback announced in August, and its board has approved another 20 trillion won repurchase program. About half of the new program is intended for cancellation, while the rest is reserved for employee performance incentives.
Cancelling repurchased shares reduces the number of outstanding shares, concentrating future earnings and dividends across a smaller base. The scale of the plan also signals that SK hynix believes its cash generation can support substantial capital returns while it raises investment in manufacturing.
Yongin production plans move closer
Capital spending and infrastructure investment will increase from this year as SK hynix prepares to bring the first phase of its Yongin fabrication facility into production next year, the company said. The expansion comes as it seeks to meet contracted demand without abandoning the higher-margin memory categories now driving its earnings.
Chief executive Kwak Noh-jung also said SK hynix has stopped reviewing a U.S. initial public offering for Solidigm, its NAND subsidiary. Keeping Solidigm within the group preserves direct control over a NAND business that is benefiting from the same recovery in pricing, even though the company’s strongest momentum is currently concentrated in DRAM and HBM.
The results show a memory manufacturer using an exceptional pricing environment to strengthen its balance sheet, return cash to shareholders and commit more capacity to AI-oriented products. The near-term constraint is likely to fall most heavily on buyers without multi-year supply agreements, particularly consumer-device makers and smaller data-center operators competing for the same pool of advanced memory.
Want deeper macro context for SK hynix’s boom? Explore how fiscal policy shapes liquidity, risk appetite, and semiconductor valuations.
Disclaimer: The content on this page is provided for general informational purposes only and does not represent the views or financial advice of Toobit. We make no guarantees regarding the accuracy or completeness of this information and shall not be held liable for any errors, omissions, or outcomes resulting from its use. Investing in digital assets involves risk; users should independently evaluate their financial situation and the risks involved. For further details, please consult our Terms of Service and Risk Disclosure.
