SK hynix posts record operating profit of 83.3338 trillion won in third quarter
Key Facts
SK hynix reported record preliminary results for the third quarter of 2026 on October 28, with revenue of 104.6155 trillion won and operating profit of 83.3338 trillion won, for an operating margin of 80%, the company said. But net profit was 39.7756 trillion won, down 58% from the previous quarter despite increases of 32% in revenue and 38% in operating profit. Year on year, revenue rose 328%, operating profit 632% and net income 216%. The company said the results were driven by higher prices for its main products as demand for AI memory grew. It said the figures are preliminary and its review of the quarter’s results is not yet complete, and they may change during the independent audit.
Operating profit exceeded the LSEG SmartEstimate of 76.7 trillion won, Reuters reported, and the stock rose about 7% in Wednesday morning trading to its highest level in two weeks, according to the Associated Press. The Kospi also gained 5.6% in early trading, as Asian stocks advanced after AI shares rose on Wall Street. The company had previously said it would release its results before 9 a.m. Seoul time on October 28, followed by a conference call at the same time. In its results announcement, it confirmed that it would present the third-quarter figures as preliminary. This caveat frames the contrast between operating growth and declining net profit within figures that have not completed independent review.
The company attributed its performance to higher prices for its main products as demand for AI memory grew, as well as the competitiveness of its high-value products. In DRAM, sales of DDR5 for servers rose sharply, and HBM4 shipments began during the quarter. In NAND, sales of eSSDs using 321-layer TLC technology expanded, alongside growth in high-value products for data centers. These developments combine demand for memory used in servers with products designed for AI infrastructure. SK hynix said higher prices and rising demand for AI memory contributed to the results.
Cash and cash equivalents stood at 114.5 trillion won at the end of the third quarter, up 26.5 trillion won from the end of the previous quarter, the company said. Loans fell 2.8 trillion won to 15.8 trillion won, while net cash rose to 98.7 trillion won. These figures came as the company forecast a significant increase in investment next year, when the first phase of its Yongin facility enters full operation and infrastructure investment accelerates in South Korea and abroad. It said, however, that it would adjust the scale and timing of investment flexibly. The statement did not specify a total figure for expected spending.
SK hynix plans to raise its M15X facility to full capacity by year-end to support HBM4 production. The company expects this generation to surpass HBM3E in shipment volume and revenue during the fourth quarter of 2026, and to become its main product from that quarter. It also expects demand to continue exceeding supply in the memory market through 2030, citing the complexity of advanced manufacturing processes and the long time needed to build new production facilities. The company said the market structure in which demand exceeds supply is likely to persist through that year. The company links these forecasts to expanded production capacity for the new generation and continued tight supply in the sector.
To secure future demand, the company said it had signed long-term supply agreements with 14 major customers. The agreements cover more than 50% of its total production capacity for 2027 and 2028, while contracts of this type typically run for five years, according to its statement. The company expects investment to increase significantly next year as the first phase of its Yongin facility enters full operation and infrastructure projects accelerate at home and abroad. At the same time, it kept the scale and timing of investment subject to adjustment according to business conditions. The plans come as the company expects memory demand to remain above supply through 2030.
The company announced a shareholder returns plan of about 100 trillion won for fiscal 2026, including cash dividends of at least 30 trillion won and share buybacks and cancellations of at least 60 trillion won. The plan includes a 40 trillion won buyback announced in August, which the company said it completed the previous week. Separately, the board approved a third-quarter dividend of 14 trillion won, equivalent to 20,000 won per share, alongside a 20 trillion won share buyback. Of that buyback, the company will cancel shares worth 10 trillion won and allocate about 10 trillion won to employee compensation. It said the per-share dividend comprises 10,000 won reflecting improved earnings and a special dividend of 10,000 won related to gains on its investment in Kioxia.
In a separate development ahead of the results announcement, SK hynix halted its review of a Solidigm listing, a decision it announced on October 23. The company said that after assessing financial market conditions and other factors, it concluded that proceeding with the offering at that time would not be the best way to achieve the originally intended outcome. The CEO explained the background to the decision when the company announced its third-quarter results on October 28. The development comes alongside the company’s plans to increase HBM4 production and expand capacity. The results statement did not set a new date for resuming the listing review.