Micron jumps 4% premarket after SK hynix posts record operating profit of 83.3 trillion won
Key Facts
Micron shares rose 4% in U.S. premarket trading on October 28, while U.S.-listed SK hynix shares jumped 7.8%, after the South Korean company reported quarterly results. The move followed SK hynix posting record operating profit of 83.3 trillion won in the third quarter, according to The Associated Press. EL7 data showed Micron closed at $928.76 on October 27, versus $903.7 in the previous session. SK hynix closed at $145.36 on October 27, after $142.62 on October 26. These closing prices separate the previous session's performance from the gains recorded before the market opened the following day.
SK hynix's operating profit margin reached 80% in the third quarter, compared with 76% in the second quarter and 47% in the same period a year earlier. The trajectory shows the margin rising alongside the quarterly jump in operating profit. The company attributed its record results to higher prices for key products as demand for AI memory grew. In its statement, it said, "Prices of key products rose on the back of growing demand for AI memory." It added that the competitiveness of its high-value-added products supported performance, as sales of products for servers continued to expand.
On its product mix, the company said HBM4 continued to expand alongside high-value server products. Sales of DDR5 memory for servers also rose sharply, while sales of eSSDs made with 321-layer NAND technology increased. The statement placed these products at the center of the company's response to demand tied to AI infrastructure. SK hynix has already begun shipping HBM4, according to its announcement. The new technology is moving from preparation to actual customer supply.
SK hynix expects HBM4 to surpass HBM3E in shipment volume and revenue in the fourth quarter, becoming its flagship product. It said it would increase HBM4 production and aims to bring the M15X facility to full capacity by year-end. It also said advance supply agreements cover more than half of production capacity for 2027 and 2028, according to the framing in the company's materials. These commitments give the company greater visibility into part of its future output as it prepares to expand capacity. The fourth quarter remains the point at which the company expects HBM4 to move ahead of the previous generation in shipments and revenue.
The company expects the supply-demand imbalance to persist through 2030, with demand remaining above supply. It attributed this to the complexity of advanced manufacturing technologies and the long time needed to build new production facilities. It said short-term memory demand is benefiting from enterprise and personal AI applications. Over the medium and long term, it expects physical AI applications, including autonomous driving and robotics, to support demand. It also forecast a significant increase in investment next year as the first phase of the Yongin complex begins full operations, with the scale and timing to be adjusted according to demand, profitability and efficiency.
Alongside its expansion, SK hynix announced shareholder returns of about 100 trillion won in fiscal 2026. The plan includes cash dividends of at least 30 trillion won and share buybacks and cancellations worth at least 60 trillion won. In the same announcement, the board approved a cash dividend of 14 trillion won for the third quarter and share buybacks worth 20 trillion won. These figures combine the fiscal-year return commitments with the decisions for the third quarter. The announcement comes as the company prepares to increase HBM4 production and invest in capacity.
The quarterly results painted a mixed picture of profitability: while the operating margin rose, net profit fell 58% quarter on quarter to 39.7756 trillion won from 93.9226 trillion won in the second quarter. The company reported both figures in its results statement, alongside revenue and operating profit growth data. The quarterly decline in net profit limits an assessment of the results based solely on operating metrics. The company, meanwhile, based its outlook on continued memory demand and the expansion of AI applications. Markets are watching for HBM4 to become the flagship product in the fourth quarter, as the company expects.