SK Hynix Posts Record 83.3 Trillion Won Profit on AI Memory Boom

SK Hynix reported the biggest quarterly profit in its history on Wednesday, as demand for memory chips used in artificial intelligence data centres outran supply by a margin that has few precedents in the industry.

The South Korean company posted an operating profit of 83.33 trillion won for the third quarter, up 632.1 percent from a year earlier, on revenue of 104.62 trillion won, up 327.9 percent. The operating margin reached 79.7 percent. Both figures set records, and both beat the market consensus compiled by FnGuide, which had expected operating profit of 76.96 trillion won on revenue of 98.23 trillion won.

SK Hynix paired the results with a shareholder return programme of about 100 trillion won, roughly 75 billion dollars, for this year. The total includes more than 30 trillion won in cash dividends and more than 60 trillion won in share buybacks and cancellations, on top of a 40 trillion won buyback completed on October 21. The board approved a further 20 trillion won purchase of treasury shares, with 10 trillion won to be cancelled for shareholders and 10 trillion won set aside for employee compensation.

Memory sold out years ahead

The company said it has signed long term supply agreements with 14 major customers, covering more than half of its planned production capacity for both 2027 and 2028. Management forecast that memory demand will exceed supply through 2030, a direct answer to investors who had priced in a sharp fall in chip earnings next year.

Shipments of HBM4, the newest generation of high bandwidth memory used in AI accelerators, are ramping up, and the company expects HBM4 to pass the older HBM3E in both shipment volume and revenue in the fourth quarter. Cumulative operating profit for the first nine months of the year reached 181.49 trillion won on revenue of 236.51 trillion won.

One figure moved the other way. Net profit fell 58 percent from the previous quarter to 39.78 trillion won, because the second quarter had included large gains linked to the company's stake in Japanese chipmaker Kioxia. Analysts had expected the drop and the share price ignored it.

Shares lead a Seoul surge

SK Hynix shares rose 8.65 percent to 1,457,000 won in morning trade in Seoul, and Samsung Electronics gained 8.56 percent. The benchmark Kospi index climbed about 6.2 percent, its biggest rise in weeks, with chip stocks doing most of the work. The stock had closed on October 23 about 57 percent below its 52 week high, after a long slide driven by fears that the AI memory boom was peaking. Wednesday's numbers were written to answer that fear directly: record profit, a sold out order book, and a supply shortage the company itself expects to last four more years.