SK hynix reported a record fiscal 2026 third quarter, with revenue surpassing 100 trillion won for the first time as high-bandwidth memory, server DRAM and enterprise storage demand lifted its results. The South Korean chipmaker said HBM4 entered broad-volume shipments during the quarter and is expected to overtake HBM3E in both shipment volume and operating revenue in the fourth quarter.
Revenue reached 104.62 trillion won, up 328% from a year earlier and 32% from the previous quarter, SK hynix said in its earnings update. The result exceeded the market estimate of roughly 98.23 trillion won cited in the company’s release.
Operating profit rose to 83.33 trillion won, a 632% year-on-year increase and a 38% gain from the prior quarter. That was also above the market expectation of about 76.96 trillion won.
The figures point to a sharp change in the memory industry’s earnings structure: advanced chips used in artificial intelligence servers are generating substantially higher returns than conventional memory products. SK hynix said its operating margin reached about 80%, compared with 76% in the second quarter and 47% a year earlier.
Net profit was 39.78 trillion won, up 216% from the same period last year but down 58% from the second quarter. SK hynix did not provide a detailed explanation for the sequential decline in net profit in the supplied earnings summary.
HBM4 set to replace HBM3E as main product
The most consequential element of the report was SK hynix’s timetable for HBM4. The company said broad-volume shipments began in the third quarter, placing the newest generation of high-bandwidth memory on track to become its primary HBM product line within months.
HBM chips stack multiple layers of memory vertically and connect them through dense interconnects, enabling much faster data movement than standard DRAM. That performance is particularly valuable in AI systems, where graphics processors and other accelerators need to access large data sets without being held back by memory bandwidth.
SK hynix expects fourth-quarter HBM4 shipment volume and operating revenue to exceed those of HBM3E. The forecast indicates that its product mix is moving rapidly toward the new generation rather than remaining dependent on the HBM3E products that helped establish the company’s recent AI-memory position.
A faster shift to HBM4 could also strengthen the company’s pricing and margin profile if demand remains concentrated among major data-center customers upgrading AI infrastructure. The report did not disclose HBM4 prices, unit volumes, or the individual customers receiving the chips.
Server memory and enterprise SSDs add support
The quarter was not driven by HBM alone. SK hynix said stronger server DDR5 sales supported its DRAM business, while NAND performance benefited from increased shipments of 321-layer TLC enterprise solid-state drives.
DDR5 is the current-generation standard for server memory, and its growing use reflects demand for new data-center hardware rather than only AI accelerators. Enterprise SSDs, meanwhile, provide the high-capacity storage needed to retain and retrieve the growing volumes of data used to train, run and manage AI applications.
SK hynix said data centers were seeking higher-capacity storage systems alongside advanced memory products. The combination gives the company exposure to several parts of the server buildout: HBM for AI computing, DDR5 for general-purpose servers, and NAND-based SSDs for storage.
That mix may help reduce reliance on a single product category, although HBM remains the clearest driver of the company’s exceptional profitability. An 80% operating margin leaves little doubt that supply of leading-edge memory remains constrained relative to demand from customers deploying advanced computing systems.
Long-term deals cover more than half of 2027-28 capacity
SK hynix said it had signed long-term supply agreements with 14 major customers, covering more than half of its total production capacity for 2027 and 2028. Some agreements typically run for about five years and include pricing mechanisms linked to market prices within a pre-agreed range, according to the company.
Such contracts give chipmakers greater visibility over production planning during a period when building advanced memory capacity requires substantial capital spending and long lead times. They also give large data-center customers more certainty that they can obtain critical components as they expand computing infrastructure.
The company expects memory supply and demand conditions to remain tight potentially through 2030. It plans to bring the M15X facility to maximum capacity by the end of the year and said investment spending would rise in 2027 for M15X and related infrastructure projects in Korea and overseas.
Cash position expands as debt falls
SK hynix ended the quarter with 114.5 trillion won in cash and cash equivalents, an increase of 26.5 trillion won from the previous quarter. Borrowings fell by 2.8 trillion won quarter on quarter to 15.8 trillion won, leaving net cash of 98.7 trillion won.
The stronger balance sheet is allowing the company to pair capacity expansion with substantial shareholder distributions. SK hynix said it plans around 100 trillion won in shareholder returns during 2026, including at least 30 trillion won in cash dividends and at least 60 trillion won in share buybacks and cancellations.
The company set its third-quarter dividend at 20,000 won per share, including a 10,000 won special dividend.
Shares listed in South Korea rose about 2.4% in early trading after the earnings release, according to the supplied market update. The immediate market response reflected the scale of the earnings beat and SK hynix’s projection that HBM4 will move from an initial shipment phase to the center of its memory business before the year ends.
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