SK hynix posts record Q3 profit on AI memory boom, unveils 100 trillion-won return plan

Operating profit rose 557.2 percent from a year earlier to 83.33 trillion won in the July-September period, while revenue climbed 327.9 percent on-year to 104.61 trillion won, according to the company's regulatory filing. Net profit also reached a record 39.77 trillion won, up 215.7 percent from a year earlier. SK hynix said it had posted record quarterly revenue and operating profit for six consecutive quarters since the second quarter of last year.

"Amid market conditions in which prices of key products rose on growing demand for AI memory, the company once again achieved record quarterly revenue and operating profit, driven by its competitiveness in high-value-added products," SK hynix said. The company has become one of the biggest beneficiaries of the AI boom by supplying high-bandwidth memory chips to Nvidia Corp. and capitalizing on soaring prices of conventional memory chips. Its operating profit margin exceeded 80 percent in the third quarter, setting a record and reflecting tight supply conditions.

"Virtually all of our DRAM and HBM production capacity for the next three years through 2029 has already been sold out," SK hynix said during a conference call. The company said the outlook reflects volumes already secured under long-term agreements and demand currently under detailed discussion with customers. "The customer trust built through our technological competitiveness is leading to long-term contracts, and our business structure is transforming into one with earnings stability and mid- to long-term demand visibility," CEO Kwak Noh-Jung said.

SK hynix said the memory supply shortage is expected to persist through 2030 as investment in AI infrastructure expands. Its sixth-generation HBM4 chips will become its main product starting in the fourth quarter. The results came amid renewed concerns that semiconductor demand may have peaked, fueled by questions over the profitability of AI investments. SK hynix said it expects AI investment momentum to continue as the financial burden on major customers eases.

The company announced an additional plan to return 60 trillion won to shareholders after completing a 40 trillion-won program last week. Of the more than 100 trillion won in planned shareholder returns for 2026, cash dividends will account for more than 30 trillion won. SK hynix said it would determine dividend payments based on operating performance, provide additional returns through special dividends when it realizes substantial investment gains and continue share buybacks every quarter. It also plans to return most of its realized gains from its investment in Japan's Kioxia Corp. through a special dividend, with payments scheduled for the third quarter and the end of the fiscal year. "Our principle has been to share the majority of the gains from successful strategic investments with our shareholders," Kwak said.

The announcement follows the company's decision Friday to suspend plans to list its U.S. subsidiary, Solidigm, citing market conditions. Reports had circulated that Solidigm was considering an initial public offering in the United States as early as next year, potentially valuing the subsidiary at up to US$150 billion. The decision came amid strong shareholder opposition and regulatory scrutiny over concerns that a separate listing could undermine minority shareholders' interests. "The IPO was intended to raise external capital for the expansion of Solidigm's production facilities, and thereby to lighten our own investment burden and broaden our capacity for shareholder returns," Kwak said. "However, after carefully considering recent financial market conditions and other factors, we concluded that proceeding at this time would not be the best way to achieve the originally anticipated outcome."

SK hynix shares had fallen nearly 30 percent over the three months following the announcement of its second-quarter earnings. On Wednesday, the shares were trading more than 10 percent higher after the company released its earnings results before the market opened.