SK hynix posts record operating profit of 83.3338 trillion won in third quarter
Key Facts
SK hynix said on October 28 that revenue reached 104.6155 trillion won in the third quarter of 2026, with operating profit of 83.3338 trillion won and an operating margin of 80%. Revenue topped 100 trillion won for the first time in the company’s history, according to its statement. Revenue rose 32% and operating profit increased 38% from the previous quarter, while they jumped 328% and 632%, respectively, year on year. The company said higher prices for its main products and growing demand for AI memory supported the results.
The operating margin widened to 80% from 76% in the second quarter, while net profit fell from 93.9226 trillion won to 39.7756 trillion won. The divergence between operating performance and the bottom line comes as operating profit rose to 83.3338 trillion won from 60.5426 trillion won in the previous quarter. SK hynix attributed the growth in its business to higher prices for its main products and increased demand for AI memory. It said server DDR5 sales rose sharply and HBM4 shipments began on a meaningful scale. In its NAND business, sales of 321-layer TLC eSSDs expanded, according to the company. These sales put memory and storage for servers among the quarter’s growth drivers, alongside high-bandwidth memory products.
Profit growth was accompanied by an improvement in the company’s cash position, with cash and cash equivalents reaching 114.5 trillion won at the end of the third quarter, up 26.5 trillion won from the end of the previous quarter. Loans fell by 2.8 trillion won to 15.8 trillion won, lifting net cash to 98.7 trillion won. These figures provide financial context for the expansion plans the company announced as demand for memory grows. SK hynix said it plans to ramp up its M15X facility to full capacity by the end of the year to support HBM4 production. It expects HBM4 to surpass HBM3E in shipment volume and revenue in the fourth quarter and become its main product. That quarter will be the first announced test of the new generation’s move to a leading position in the sales mix.
The company sees tight supply as a continuing factor in the memory market, with demand expected to exceed supply through 2030. It linked this outlook to the difficulty of advanced manufacturing processes and the time required to build new production facilities. It said the “structure of demand exceeding supply” is likely to persist through that year. In this context, it signed long-term supply agreements with 14 major customers, covering more than 50% of its total production capacity for 2027 and 2028. The agreements give the company visibility into a large portion of future output, while providing customers with supply arrangements extending beyond next year. SK hynix also forecast a significant increase in investment next year as the first phase of its Yongin facility enters full operation and infrastructure investment accelerates at home and abroad.
The company announced a shareholder return plan of about 100 trillion won for fiscal 2026, including cash dividends of at least 30 trillion won and share buybacks and cancellations worth at least 60 trillion won. The plan includes 40 trillion won in share buybacks announced in August, which the company said it completed the previous week. Separately, the board approved a third-quarter cash dividend of 14 trillion won, equivalent to 20,000 won per share, along with share buybacks worth 20 trillion won. The company will cancel shares worth 10 trillion won from the shares allocated to shareholder returns. In Seoul trading on October 28, the stock jumped about 8% to 1,446,000 won after the results announcement, according to Investing.com. It had closed at 145.36 on October 27, according to EL7 data, compared with a close of 142.62 in the previous session.
Separately from its quarterly results, SK hynix said it had halted its review of a Solidigm listing. Its chief executive attributed the decision to current financial market conditions, saying that proceeding with the listing “would not be the best way at this time to achieve the outcome originally intended.” He added that the company halted the review after assessing market conditions and other factors. The move comes as the company focuses on increasing HBM4 production and expanding capacity to meet demand. The production plans it announced link the ramp-up of M15X capacity by year-end with expectations for higher shipments and revenue in the fourth quarter. Next year’s investments, according to its statement, will coincide with the full operation of the first phase of the Yongin facility.