South Korean chipmaker SK hynix reported record third-quarter 2026 revenue of 104.62 trillion won and operating profit of 83.33 trillion won, driven by rising prices and demand for artificial intelligence (AI) memory. The company also announced plans for approximately 100 trillion won in shareholder returns during 2026, alongside further investment in advanced memory production.
Key Overview
- Revenue increased 328% year on year to 104.62 trillion won, crossing 100 trillion won in a quarter for the first time.
- Operating profit reached 83.33 trillion won, up 632% from a year earlier, with an 80% operating margin.
- Net profit rose 216% year on year to 39.78 trillion won, despite falling 58% from the previous quarter.
- HBM4 is expected to overtake HBM3E in shipments and revenue in the fourth quarter.
- Supply agreements with 14 major customers cover more than half of planned production capacity for 2027 and 2028.
- Planned 2026 shareholder returns total approximately 100 trillion won through dividends and share buybacks and cancellations.
AI Memory Demand Drives Record Earnings
According to the company’s third-quarter financial results, revenue climbed 32% from the previous quarter, while operating profit rose 38%. The results reflect both higher memory-chip prices and stronger sales of premium products used in AI servers and data centres.
Operating profit was more than seven times the 11.38 trillion won reported in the same quarter of 2025. Net income reached 39.78 trillion won, compared with 12.60 trillion won a year earlier. However, the quarterly fall in net income shows that the company’s earnings measures did not all move in the same direction.
Growth was supported by server DDR5 memory, the ramp-up of high-bandwidth memory (HBM4), and increased sales of 321-layer NAND-based enterprise solid-state drives. An independent earnings report also confirmed the scale of the company’s year-on-year growth.
HBM4 Expansion Targets AI Infrastructure Spending
SK hynix expects HBM4 to surpass HBM3E in both shipments and revenue during the fourth quarter of 2026. It intends to ramp up its M15X facility to maximum capacity by year-end, while expanding advanced DRAM production and higher-capacity enterprise storage.
The manufacturer believes demand for memory will exceed available supply through 2030, citing the time required to build semiconductor plants and the technical complexity of leading-edge manufacturing. That is a company forecast rather than a certainty, and it depends partly on sustained investment in AI infrastructure.
Long-Term Contracts Strengthen Sales Visibility
The company has signed long-term supply agreements with 14 major customers, including cloud service providers. These contracts already cover more than 50% of its expected production capacity for 2027 and 2028.
The agreements include pricing mechanisms that respond to market conditions within negotiated ranges. This offers greater visibility over future demand without fully insulating revenue from changes in chip prices.
SK hynix plans to increase investment significantly in 2027 as its Yongin Phase 1 facilities enter full-scale operation and additional infrastructure projects advance.
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Shareholders Set for Major Payouts
The chipmaker outlined approximately 100 trillion won in shareholder returns for 2026, including at least 30 trillion won in cash dividends and at least 60 trillion won in share repurchases and cancellations.
Its board approved a third-quarter dividend of 20,000 won per share, split equally between an ordinary dividend and a special dividend linked to gains from its investment in Japanese memory-chip manufacturer Kioxia.
The board also approved 20 trillion won in share repurchases, but only 10 trillion won of that amount is earmarked for cancellation and shareholder returns. The remaining approximately 10 trillion won is intended for employee compensation and is excluded from the shareholder-return total.
Separately, SK hynix discontinued its review of a proposed initial public offering of its Solidigm subsidiary, citing financial-market conditions and doubts about whether an offering would achieve its intended benefits.
Outlook: Strong Demand Meets Heavy Investment Needs
Record profits, substantial cash reserves and long-term contracts place SK hynix in a strong position to fund additional capacity. Nevertheless, its expansion plans will require considerable capital, while future margins remain exposed to semiconductor pricing cycles and the pace of AI spending.
For investors, the central question is whether the current surge in AI memory demand can sustain high profitability as manufacturers expand supply over the coming years.
Sources: SK hynix Newsroom / Yonhap News Agency / Reuters
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