Be The Investor ResearchSK hynix Record Earnings Put Its October Selloff in Perspective
SK hynix posted record third-quarter revenue and operating profit as HBM4 shipments expanded, while long-term agreements cover more than half of 2027 and 2028 capacity. The result strengthens demand visibility but does not remove memory-cycle risk.
SK hynix answered a 33% October share-price decline with the strongest quarter in its history. The Korean memory maker reported third-quarter revenue of 104.6 trillion won and operating profit of 83.3 trillion won, both records. Revenue rose 32% from the second quarter and 328% from a year earlier, while the operating margin reached 80%.
The scale of those figures matters because the selloff had reflected doubts about whether AI infrastructure spending could keep supporting extraordinary memory profits. SK hynix said higher prices and a richer mix of high-value products drove the quarter. HBM4 shipments began in earnest, server DDR5 sales increased, and data-center NAND products continued to expand.
Demand visibility is also improving. The company has signed long-term agreements with 14 major customers covering more than half of its expected production capacity for 2027 and 2028. Pricing under those agreements can move within agreed ranges, which should protect profitability better than fixed pricing would. SK hynix expects HBM4 to surpass HBM3E in both shipment volume and revenue during the fourth quarter.
That visibility is not the same as a guarantee. Management plans a significant increase in investment next year as new capacity comes online. A downturn in memory pricing, weaker customer spending or faster competition in conventional DRAM and NAND could make that spending less productive. The company also said its view that memory supply will remain tight through 2030 is a forecast, not an established outcome.
Shareholder returns add another dimension. SK hynix plans about 100 trillion won of returns for fiscal 2026, including at least 30 trillion won of dividends and at least 60 trillion won of repurchases and cancellations. The company tied much of the special return to gains from its Kioxia investment, so investors should not treat the entire amount as a recurring baseline.
The official release supports the core bullish case: record profits, rising HBM4 shipments and customer contracts that extend beyond the current cycle. The remaining question is valuation after the rebound and whether margins near 80% can survive a future normalization in memory prices. The quarter reduced uncertainty about near-term demand, but it did not abolish the industry's cyclicality.