SK hynix kept roughly 80 cents of every dollar it sold in the third quarter. The Korean memory-chip maker reported revenue of 104.6 trillion won (about $75 billion) for July to September, with operating profit of 83.3 trillion won (around $60 billion) — a 79.7% operating margin, the highest in the company’s history and a figure most software companies would envy, let alone a factory business.
The numbers, released on October 28, put SK hynix past 100 trillion won in quarterly sales for the first time. Revenue rose 328% from a year earlier and operating profit climbed 632%, comfortably beating brokerage expectations of roughly 77 trillion won in profit. Net profit came in at 39.8 trillion won.
The company’s ticker shorthand, “skhy,” was among the top searches in Korea this week, as investors tried to work out whether a chip business can really earn like this for long.
Why one company’s earnings are a national event
SK hynix is the second-largest company on the Korean stock market after Samsung Electronics, and together the two dominate the global market for memory chips. SK hynix’s edge is high-bandwidth memory, or HBM: stacked DRAM chips bolted onto AI accelerators like Nvidia’s GPUs. Every AI data center being built in the United States needs enormous quantities of it, and SK hynix has been the main supplier.
Executives said on the earnings call that the company’s HBM and other DRAM output is effectively sold out through 2029. Signed long-term agreements with 14 major customers, including leading cloud providers, already cover more than half of planned production capacity for 2027 and 2028. Kim Ki-tae, who runs HBM sales and marketing, told analysts that customers are asking for more than twice what the company can supply.
The newest product, HBM4, began shipping in volume during the quarter and is expected to overtake the previous generation, HBM3E, in both shipments and revenue in the fourth quarter. The company expects memory supply to fall short of demand through 2030, citing the difficulty of leading-edge manufacturing and the years it takes to bring a new fab online.
A 100 trillion won thank-you to shareholders
The headline that grabbed Korean investors was the payout. SK hynix said it plans to return about 100 trillion won (roughly $75 billion) to shareholders in 2026: at least 30 trillion won in cash dividends and more than 60 trillion won in share buybacks and cancellations. That includes a 40 trillion won buyback announced in August and completed last week.
For the third quarter alone, the board approved a 14 trillion won dividend of 20,000 won per share. Half of that is a regular dividend; the other half is a special payout funded by gains on the company’s investment in Kioxia, the Japanese NAND maker. A further 20 trillion won buyback was approved, with half to be cancelled and the rest set aside for employee compensation.
CFO Kim Woo-hyun said the current share price does not fully reflect the company’s earnings and cash flow. Shares had fallen 18.8% between September 1 and October 27 as investors fretted about an AI spending slowdown, before jumping 10.9% on the day of the results.
SK hynix also confirmed it has shelved plans for a Nasdaq listing of Solidigm, its US-based NAND subsidiary. CEO Kwak Noh-jung said that given recent market volatility, an IPO now would not deliver the benefits originally expected.
What comes next
Capital spending is set to rise sharply in 2027 as the first phase of the company’s new Yongin campus, south of Seoul, enters full-scale operation. Management said it aims to lift revenue and profit further next year, and that it will scale investment to demand and profitability.
The open question for Seoul is how long an 80% margin can survive contact with reality. Samsung Electronics is pushing hard to catch up in HBM, and the long-term contracts SK hynix signed let prices move with market conditions within agreed ranges. For now, though, the company is holding a cash pile of 114.5 trillion won and a customer queue stretching to the end of the decade — a comfortable position from which to watch the AI debate play out.