South Korean chip giant SK Hynix reported record-breaking third-quarter revenue of 104.6 trillion won ($78.8 billion) and an operating profit of 83.4 trillion won ($62.8 billion), boosted by sales of high-bandwidth memory and server DRAM.
According to a Wednesday announcement, the company's revenue rose 32% from the previous quarter, and operating profit rose 38%, producing an operating margin of 80%. It reported a net profit of 39.8 trillion won ($30 billion), and noted that free cash flow reached 114.5 trillion won ($86.2 billion) at the end of the period.
The company said it saw higher shipments of HBM4, which the company expects will become its main high-bandwidth memory product in the fourth quarter, along with increased sales of server DDR5 and high-capacity enterprise SSDs.
SK Hynix also revealed that it has signed long-term agreements with 14 major customers, including large cloud service providers. This covers more than half of its planned production capacity for 2027 and 2028, the firm said.
AI demand trumps supply through 2030
The chipmaker said it expects the broader memory market to sustain its growth, with enterprise and personal AI leading short-term growth. It stated that physical AI will likely drive mid-to-long-term growth.
"The company assessed that supply, on the other hand, is not keeping pace with the growth of the market," SK hynix said. "Given technical difficulty of leading-edge processes and the long lead time required to build new production facilities, it expects the structure in which demand exceeds supply to persist through 2030."
To address this gap, SK hynix plans to increase the share of its 10-nanometer-class sixth-generation DRAM process, expand output of DDR5 and LPDDR5 SOCAMM for AI servers, and bring its M15X facility to full capacity by year-end to raise HBM4 production. It also intends to raise the ratio of 321-layer NAND at its domestic plants.
$75 billion shareholder returns
Separately, the company outlined shareholder returns of approximately 100 trillion won ($75.3 billion) for the fiscal year of 2026, comprising a base annual dividend per share of more than 30 trillion won ($22.6 billion) and share repurchases and cancellations totaling around 60 trillion won ($45.2 billion). It also declared a Q3 dividend of 20,000 won ($15) per share, half of which is a special distribution tied to gains from the company’s Kioxia investment.
"Our principle has been to share the majority of the gains from successful strategic investments with our shareholders," CEO Kwak Noh-Jung said. "In line with this principle, we have decided to return the gains realized from our investment in Kioxia this year to shareholders through a special dividend."