SK hynix said on Wednesday that its third-quarter operating profit rose more than sevenfold from a year earlier to a record 83.33 trillion won (US$62.8 billion), as prices for AI memory climbed and shipments of its newest high-bandwidth memory, HBM4, ramped up. The South Korean chipmaker also set out shareholder returns of about 100 trillion won for 2026.

The results lifted the whole Seoul market. SK hynix shares rose 10.89% to 1.49 million won, and the Kospi jumped 6.63% to 6,012.44, Yonhap reported. That was the index's first close above 6,000 in 10 sessions, according to Aju Press. Chip stocks had sold off on fears that the memory boom could fade within a year or two, The Korea Times said, and SK hynix's Nasdaq-listed shares had fallen 24% in the month before the report, according to 24/7 Wall St.

Revenue reached 104.62 trillion won, the company's first quarter above 100 trillion won, up 32% from the second quarter and 328% from a year earlier. Operating profit rose 38% from the April-to-June period, and the operating margin widened to 80%, from 76% in the second quarter and 47% a year earlier.

Both figures beat forecasts. The FnGuide consensus had called for operating profit of 76.96 trillion won and revenue of 98.23 trillion won, Korea JoongAng Daily reported.

Net profit was the weak spot. It came to 39.78 trillion won, up 216% from a year earlier but down 58% from the second quarter, and well short of FnGuide's 61.29 trillion won estimate. 24/7 Wall St. attributed the gap to 32.6 trillion won of non-operating expenses, including currency losses and losses on investment holdings.

HBM4 and Server Memory Drove SK Hynix's Quarter

SK hynix said prices of its main products rose as demand for AI memory grew. In DRAM, sales of server DDR5 increased sharply and HBM4 shipments began in earnest. In NAND flash, sales of its 321-layer enterprise solid-state drives expanded.

The company expects HBM4 to overtake the previous generation, HBM3E, in both shipments and revenue in the fourth quarter, making it the mainstream product. It plans to bring its M15X fab to full capacity by year-end.

Management expects supply to stay tight for years. SK hynix said demand would exceed supply through 2030 because leading-edge processes are hard to master and new fabs take a long time to build. It has signed long-term agreements with 14 major customers, including global cloud providers, that cover more than half of its production capacity for 2027 and 2028. The contracts typically run five years, with prices floating within agreed ranges.

Chief Executive Kwak Noh-Jung said the contracts were shifting the business toward “earnings stability and mid-to-long term demand visibility.” On the earnings call, the company said its DRAM and HBM volume for the three years through 2029 was “effectively sold out,” Korea JoongAng Daily reported.

Spending will climb. SK hynix said investment would rise significantly as the first phase of its Yongin site begins full-scale operation next year, with the pace tied to demand and profitability. Chief Financial Officer Kim Woo-hyun said on the call that capital expenditure in 2027 would increase significantly from 2026, according to 24/7 Wall St. The same report said he expects 2027 demand to grow in the mid-20% range for DRAM and in the high teens for NAND, while PC and mobile shipments fall.

The company also ended its review of a public listing for its Solidigm unit. Kwak said the timing no longer suited the aim of raising outside capital to fund Solidigm's expansion.

A 100 Trillion Won Return Plan

For fiscal 2026, SK hynix plans shareholder returns of about 100 trillion won, or roughly US$75.3 billion at the conversion used by Yonhap. The total includes at least 30 trillion won in cash dividends and at least 60 trillion won in buybacks and cancellations. The latter counts a 40 trillion won repurchase announced in August, which the company completed last week. It also committed to returning at least 50% of free cash flow.

The board approved a third-quarter cash dividend of 14 trillion won, or 20,000 won a share. Half is a regular dividend and half is a special payout that passes on gains from SK hynix's investment in Kioxia. The board also approved a 20 trillion won buyback. Half will be cancelled; the other half funds employee compensation and is excluded from the return total. Buybacks will continue every quarter, the company said.

It has the cash to pay. Cash and cash equivalents rose 26.5 trillion won during the quarter to 114.5 trillion won, and net cash stood at 98.7 trillion won.

What It Means for Seoul and the AI Supply Chain

The rally spread across Korea's chip complex. Samsung Electronics rose 9.01% to 242,000 won, and SK Square, SK hynix's largest shareholder with about 20%, gained 11.23% to 921,000 won, according to Yonhap and Aju Press. Foreign investors and institutions were net buyers, while individuals sold a net 1.8 trillion won, Yonhap said. In Tokyo, Kioxia jumped more than 10%, Aju Press reported.

SK hynix's market value rose to 1,086 trillion won. The Kospi, though, remains about 36% below its June intraday peak of 9,385.6, according to Aju Press.

Lee Jae-won, an analyst at Yuanta Securities, said SK hynix had shown that strong AI chip demand “can translate into solid operating profits and shareholder returns,” according to Yonhap.

Counterpoint Research estimates SK hynix controls more than half of global high-bandwidth memory supply, Aju Press reported. Its results follow TSMC's record third quarter, reported on Oct. 15.

Samsung Electronics, which reported preliminary third-quarter operating profit of 107.4 trillion won, releases its full results on Thursday, Oct. 29.