SK Hynix reported a record third quarter as demand for artificial-intelligence memory pushed revenue above 100 trillion won for the first time. The South Korean chipmaker said revenue reached 104.6 trillion won and operating profit 83.3 trillion won, up 328% and 632% respectively from a year earlier.
The results sent South Korean stocks sharply higher and reinforced investor enthusiasm for companies supplying the AI infrastructure boom.
HBM4 is becoming the core growth engine
SK Hynix said shipments of high-bandwidth memory and high-value server products expanded during the quarter. HBM4 is expected to overtake HBM3E in both shipment volume and revenue in the fourth quarter.
High-bandwidth memory is critical for AI accelerators because it can move large volumes of data between processors and memory at very high speed.
Revenue crossed 100 trillion won
Quarterly revenue of 104.6 trillion won marked a major milestone for the company. Operating profit reached 83.3 trillion won, producing an unusually high operating margin of 80%.
Those figures reflect both stronger pricing and a product mix tilted toward premium AI memory.
Long-term contracts improve visibility
The company said it has signed long-term agreements with 14 major customers, including global cloud service providers. The contracted volume covers more than half of total production capacity for 2027 and 2028.
That gives SK Hynix greater visibility into demand at a time when investors are debating whether AI infrastructure spending can remain at current levels.
Production capacity will expand
SK Hynix plans to ramp its M15X facility to maximum capacity by the end of the year and increase HBM4 output. The company also expects its Yongin Phase 1 project to enter full-scale operation next year.
Management said investment will rise significantly, although spending will be adjusted depending on customer demand and profitability.
NAND is also improving
The company is expanding sales of high-capacity enterprise solid-state drives and plans to increase the share of its 321-layer NAND process to more than half of domestic production in the fourth quarter.
AI data centers need not only fast memory near GPUs but also enormous storage capacity, giving NAND suppliers another avenue for growth.
Shareholder returns are extraordinary
SK Hynix said it plans shareholder returns totaling about 100 trillion won for fiscal 2026, including at least 30 trillion won in cash dividends and more than 60 trillion won in share repurchases and cancellations.
The program includes gains from the company’s investment in Kioxia and reflects its rapidly strengthening balance sheet.
The balance sheet has changed dramatically
Cash and cash equivalents stood at 114.5 trillion won at the end of the quarter, while borrowings fell to 15.8 trillion won. Net cash rose to 98.7 trillion won.
That financial position gives the company room to invest aggressively while also returning capital to shareholders.
AI memory remains a concentrated market
SK Hynix, Samsung Electronics and Micron are the dominant suppliers of advanced DRAM. In high-bandwidth memory, SK Hynix has emerged as a key supplier to the AI accelerator market.
That concentration creates pricing power but also intensifies the race to bring new generations of memory to market quickly.
The key question is sustainability
The quarter shows that AI demand is translating into exceptional earnings for memory suppliers. Investors will now focus on whether cloud companies continue to expand capital spending at the same pace in 2027 and 2028.
For SK Hynix, long-term contracts and strong cash generation provide a cushion, but the memory industry has historically been cyclical. The next test is whether AI demand can soften that cycle.
Sources
- SK Hynix Q3 2026 financial results, Oct. 28, 2026 — primary source
- Reuters global markets coverage, Oct. 28, 2026
HBM supply remains strategically tight
High-bandwidth memory requires advanced packaging and manufacturing capacity that cannot be expanded overnight. That gives leading suppliers significant bargaining power when AI accelerator demand rises quickly.
Cloud companies are therefore signing longer contracts and trying to secure future supply years in advance. SK Hynix’s disclosure that more than half of 2027 and 2028 capacity is already covered by long-term agreements shows how far ahead customers are planning.
Execution risk rises with investment
Rapid capacity expansion carries its own risks. If AI spending slows unexpectedly, memory suppliers could be left with excess production. SK Hynix says it will adjust the timing and scale of investment based on demand and profitability, reflecting lessons from previous memory cycles.
