SK hynix Operating Profit Surges to 83.3338 Trillion Won as Shares Fall 7%
Key Facts
SK hynix reported operating profit of 83.3338 trillion won for the third quarter on October 28, with revenue of 104.6155 trillion won and net profit of 39.7756 trillion won. The results came as technology companies expand their bets on AI infrastructure, with attention focused on whether demand can justify capital spending. On October 30, the company's U.S.-listed shares fell 7.0% in morning trading to $150.76, according to Investing.com. The decline was tied to a broader sell-off in technology stocks amid concerns about returns on AI spending. The company's U.S. shares had risen 10.6% on October 28, according to Reuters, following the results and gains in chipmaker shares.
The company said rising demand for AI memory lifted prices for its main products, and noted that sales of server DDR5 memory and HBM4 shipments supported DRAM business performance. It said prices rose “on the back of growing demand for AI memory.” These drivers put the quarterly results in the context of demand for components used in data centers and AI systems. Meanwhile, return-on-investment concerns captured the market's attention, as a Reuters report said the pressure had spread from U.S. technology stocks to Asian chipmakers, including SK hynix. This coincided with a 3.5% fall in South Korea's Kospi on October 30, in a market dominated by technology companies.
SK hynix expects memory demand to continue outpacing supply through 2030, citing the difficulty of advanced manufacturing technologies and the long time needed to build new production facilities. The company said it expects “demand to continue exceeding supply through 2030.” The forecast indicates that production expansion will remain central to the company's plans, alongside demand for memory used in AI applications. In the nearer term, the company expects HBM4 to surpass HBM3E in shipment volume and revenue during the fourth quarter, becoming its main product. The move links demand growth with a plan to shift toward a newer generation of high-bandwidth memory chips.
SK hynix said investment would increase significantly in 2027 as the first phase of the Yongin project reaches full operation. It added that it would balance the scale and timing of investment according to demand, profitability and investment efficiency, indicating that expansion plans will remain tied to market conditions and expected returns. Amid broader sector expansion, Samsung Electronics reported record operating profit of 107.4 trillion won on October 29 for the July-to-September quarter, and forecast that demand for AI chips would accelerate through 2027 and exceed supply. According to the Associated Press, Samsung and SK hynix together control about two-thirds of the global memory market. The two companies announced on June 29 a plan to invest a total of 800 trillion won in a new chipmaking complex in southwestern South Korea.
The stock's moves varied in the days surrounding the results; it jumped 7% in the October 27 session as South Korean shares rose ahead of corporate results and central bank decisions, according to the Associated Press. The company's U.S. shares then posted gains of 10.6% on October 28, according to Reuters, before falling 7.0% in morning trading on October 30. The latest move came amid a broader decline in Asian technology stocks, as investors worried that large and growing AI spending might not deliver sufficient returns. An Associated Press report on the South Korean market also noted that high interest rates could slow data center construction. The near-term shift in the product mix remains set for the fourth quarter, while the announced investment plan extends to 2027.