SK Hynix third-quarter profit sharply beats estimates on AI memory boost

Key points

• SK Hynix reported record quarterly revenue and operating profit for the third quarter, with sales exceeding 100 trillion won for the first time.
• Revenue rose 327.9% year on year and operating profit climbed 632.1%, sharply beating estimates.
• The chipmaker plans to return about 100 trillion won to shareholders and expects HBM4 to surpass HBM3E in shipments and revenue in the fourth quarter.

South Korean chipmaker SK Hynix released third-quarter earnings on Wednesday, posting a record high quarterly profit that sharply beat estimates. Revenue rose 327.9% from a year earlier and operating profit climbed 632.1% year on year. Compared with the previous quarter, revenue rose 31.9% and operating profit surged 37.6%.

The company posted record quarterly revenue and operating profit, with sales exceeding 100 trillion won for the first time. It also announced plans to return about 100 trillion won to shareholders, including at least 30 trillion won in cash dividends and 60 trillion won in share buybacks and cancellations.

Dividends and buybacks

SK Hynix approved a third-quarter dividend of 14 trillion won, including a special dividend funded by gains from its investment in Kioxia. The company will also buy back 20 trillion won in shares, half of which will be cancelled this year.

In August, SK Hynix had announced plans to repurchase and cancel 40 trillion won worth of its own shares and raised its shareholder return target to more than 50% of cumulative free cash flow generated between 2025 and 2027.

market volatility and share price trends

— SK Hynix

Memory demand and HBM4 outlook

SK Hynix expects HBM4 to surpass HBM3E in both shipments and revenue in the fourth quarter as it ramps up production at its M15X facility in Cheongju, South Korea. HBM, or high-bandwidth memory, is advanced memory used alongside AI processors to handle large amounts of data, and HBM4 is the sixth generation of the technology.

The company has secured long-term agreements with 14 major customers covering more than 50% of its production capacity for 2027 and 2028. It expects memory demand to outpace supply through 2030 and plans to significantly increase investment next year. Last week, SK Hynix said its U.S. subsidiary Solidigm would halt its review of potential pre-IPO fundraising and IPO options, citing market volatility and share price trends.