SK Hynix reported record third-quarter operating profit as AI demand lifted memory sales, but its lead and current profits are not assured.
A record quarter
For July to September, operating profit reached 83.33 trillion won, about 7.3 times the 11.4 trillion won reported a year earlier. Revenue was 104.62 trillion won, its first quarter above 100 trillion won, and net profit was 39.78 trillion won. Operating profit beat analysts’ expectations and was roughly 80 percent of revenue. It measures the core business before interest and taxes; net profit reflects more costs and other items.
AI demand reaches across the business
AI accelerators need large amounts of data delivered quickly. High-bandwidth memory, or HBM, is stacked close to the processor to help meet that need. Expanding AI data centers are also competing for server-grade DDR5 and enterprise storage.
SK Hynix said stronger sales of HBM4, its latest generation, and server DDR5 lifted DRAM results. Sales of high-capacity data-center storage also grew, so the demand reached several parts of its business.
A lead under pressure
HBM takes more technical work than ordinary memory: suppliers must develop and produce advanced stacks reliably at scale. SK Hynix built a strong market position as demand for AI accelerators surged. But Samsung and Micron are competing as the industry moves to HBM4, and customers have reason to qualify several suppliers.
SK Hynix said agreements with 14 major customers cover more than half its production capacity for 2027 and 2028. It expects memory demand to exceed supply through 2030, but that is a company forecast, not a settled outcome. The agreements give the company and its buyers more visibility; their pricing reflects market conditions within agreed ranges and does not lock in today’s prices or profits.
Building capacity and sharing profits
In August, SK Hynix approved about 54 trillion won for new fabs in Yongin and Cheongju. Their first cleanrooms are scheduled to open in 2028 and 2029. The company plans to expand investment further next year. New capacity takes time to arrive, and the shortage forecast depends on future AI investment and competitors’ output.
Its roughly 100 trillion won shareholder-return plan for 2026 includes at least 30 trillion won in cash dividends and at least 60 trillion won in share buybacks and cancellations. The total includes a 40 trillion won buyback announced earlier, rather than a new 100 trillion won payment. A special dividend is tied to gains from its investment in Japanese chipmaker Kioxia. SK Hynix reported 98.7 trillion won in net cash at quarter-end, while facing major investment needs.
The next test for its AI lead
Memory shortages can encourage suppliers to expand, but new factories may open after demand cools. If AI companies slow data-center spending or Samsung and Micron add capacity quickly, prices and margins could fall. For now, AI buyers compete for memory, while other electronics makers may face higher costs. The industry’s history of booms and downturns means one record quarter cannot show that record profits will last.
SK Hynix expects HBM4 to overtake HBM3E in shipments and revenue in the fourth quarter. Customers and investors will watch whether it can deliver at scale, how quickly rivals catch up and whether AI infrastructure spending continues to grow. The quarter shows the company’s strength in the current shortage, but does not decide who will lead the next generation or how long the shortage will last.