SK Hynix quarterly profit rises sevenfold to record, sets $75 billion shareholder payout

SK Hynix reported record third-quarter results on Oct 28, with operating profit of 83.3 trillion won, up 632% from 11.4 trillion won a year earlier. The South Korean chipmaker also set out about 100 trillion won (about $75 billion) in shareholder returns for 2026 and said it expects demand for memory to exceed supply through 2030.

Revenue passed 100 trillion won in a single quarter for the first time. Operating profit topped the 76.7 trillion won LSEG SmartEstimate, an analyst consensus weighted toward the more accurate forecasters, Reuters reported.

The quarter

The operating margin was 80%, and it was the sixth quarter in a row of record revenue and operating profit. Sales of server DDR5 memory rose, and shipments of HBM4, the newest generation of high-bandwidth memory (HBM) used in AI processors, began in earnest. Average selling prices of DRAM, the main working-memory chip, rose in the high-20% range from the prior quarter, according to the earnings call.

Net profit was 39.8 trillion won, up 216% from a year earlier. Chief Financial Officer Kim Woo-hyun said on the call that foreign-exchange losses and valuation losses on investment assets weighed on it. Cash and cash equivalents rose to 114.5 trillion won, and net cash reached 98.7 trillion won.

The shareholder returns

Part of the payout comes from gains on SK Hynix's investment in Kioxia, the Japanese flash-memory maker, which it holds through a consortium led by Bain Capital.

• Cash dividends for 2026 total 30 trillion won or more.
• Share repurchases and cancellations total 60 trillion won or more, including the 40 trillion won announced in August.
• The third-quarter dividend is 20,000 won per share, half of it a special dividend from the Kioxia gains.
• Most of the Kioxia gains go to shareholders through special dividends paid with the third-quarter and full-year payouts.
• SK Hynix said it will keep buying back shares every quarter.

CEO Kwak Noh-Jung said the company's principle is to share the majority of gains from successful strategic investments with shareholders.

Demand and supply

SK Hynix said shortages will persist through 2030 because leading-edge processes are technically difficult and new plants take a long time to build. It said virtually all of its DRAM and HBM capacity through 2029 is sold out, and Reuters reported the company said HBM demand is double what it can supply.

The company has signed long-term supply agreements with 14 major customers, including leading cloud service providers, covering more than 50% of its 2027 and 2028 production capacity. Those contracts typically run five years.

• SK Hynix expects HBM4 to overtake the older HBM3E in shipments and revenue in the fourth quarter.
• It plans to ramp its M15X plant to full capacity by the end of 2026 to raise HBM4 output.
• It plans to raise capital spending significantly in 2027 as the first phase of its Yongin site enters full operation, without giving a figure.

Market reaction

Korea's benchmark KOSPI index closed at 6,012.44 on Oct 28, up 6.63%. SK Hynix closed at 1.487 million won, up 10.89%, and Samsung Electronics, its larger memory rival, rose 9.01% to 242,000 won.

Who is exposed

SK Hynix supplies HBM to Nvidia and holds almost half of the HBM market, according to Nomura data cited by Reuters. In US premarket trading on Oct 28, SK Hynix's US-listed shares rose as much as 8%, and memory and storage makers Sandisk and Micron gained more than 4%, TradingKey reported.

What comes next

Samsung Electronics releases its detailed third-quarter results by division on Oct 29.