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SK Hynix Posts Record Quarter and Pledges $75 Billion Payout as AI Memory Demand Surges
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Operating profit jumps 632% to 83.3 trillion won with an 80% margin, and the company says memory supply will trail demand through 2030.
By Emmanuel Cruz ·
SK Hynix reported the most profitable quarter in its history and laid out plans to return about 100 trillion won, roughly $75 billion, to shareholders this year, sending its shares and those of other memory chipmakers sharply higher on Wednesday [1][2].
The South Korean company said revenue for the July-to-September quarter reached 104.6 trillion won, up 328% from a year earlier and the first time its quarterly sales have topped 100 trillion won [1]. Operating profit rose 632% to 83.33 trillion won, about $62.8 billion, for an operating margin of roughly 80% [1]. Reuters described the result as a more than sevenfold jump in quarterly profit [3].
The payout plan for 2026 includes at least 30 trillion won in cash dividends and more than 60 trillion won in share buybacks and cancellations [1]. The board approved a third-quarter dividend of 14 trillion won, or 20,000 won per share, and a new 20 trillion won buyback, half of which is set aside for repurchase and cancellation and half for employee compensation [1]. The company, whose shares had fallen 18.8% between Sept. 1 and Oct. 27, said it believes its stock is "undervalued" [1]. It also said a planned initial public offering of its Solidigm unit has been scrapped [1].
The outlook leaned heavily on artificial intelligence. SK Hynix said its high-bandwidth memory, used alongside AI accelerators, and its other DRAM products are sold out through 2029, and that long-term agreements cover more than half of its production capacity for 2027 and 2028 [1]. It expects memory supply to fall short of demand through 2030 and said demand is spreading beyond large technology companies to other industries and to sovereign AI investors [1]. The newest HBM4 chips are expected to overtake the previous HBM3E generation in both shipments and revenue in the fourth quarter, with the company's M15X plant due to reach full capacity by year-end [1].
Investors responded quickly. In Seoul, SK Hynix rose 7% in early trading and helped lift the Kospi 5.6% to 5,952.41, while Samsung Electronics gained 8.5% ahead of its own results on Thursday [2]. In Tokyo, flash memory maker Kioxia jumped 9.6% ahead of its earnings on Friday [2]. SK Hynix ended the Seoul session up 10.89%, according to The Korea Times [1].
The rally carried into U.S. premarket trading. As of 4:53 a.m. ET, SK Hynix's U.S.-listed shares were up 7.8%, Micron Technology had gained 4% and Western Digital had added 4.5% [3]. Nvidia rose 0.8% and Advanced Micro Devices rose 1.5% over the same period [3].
Why it matters: the company's own forecast that memory supply will trail demand for years points to memory as a constraint on the build-out of AI data centers [1]. The results arrive after weeks in which AI-related stocks swung on worries about the cost of borrowing to fund data centers and chips [2]. Sold-out capacity and long-term contracts reported by the company point to continued heavy spending on AI hardware by its customers, a signal investors have been watching closely across the semiconductor sector [1][2].
What to watch next: Samsung Electronics reports on Thursday and Kioxia on Friday, offering further readings on memory pricing [2]. In the U.S., Microsoft and Alphabet report after Wednesday's close, and investors will look at their capital spending plans for signs of returns on AI investment, a key driver of demand for memory chips [3].
Sources:
[1] The Korea Times, "SK hynix pledges to return $75 bil. to shareholders", October 28, 2026. https://www.koreatimes.co.kr/business/companies/20261028/sk-hynix-logs-record-q3-operating-profit-of-628-bil
[2] Associated Press via WSLS, "Asian stocks rise after a rally on Wall Street, while oil prices edge higher", October 28, 2026. https://www.wsls.com/business/2026/10/28/asian-stocks-rise-after-a-rally-on-wall-street-while-oil-prices-edge-higher/
[3] Reuters via SRN News, "Nasdaq futures rise as SK Hynix boosts chips before Fed decision, earnings", October 28, 2026. https://srnnews.com/nasdaq-futures-rise-as-sk-hynix-boosts-chips-before-fed-decision-earnings/
This article was produced with AI assistance. It is for informational purposes only and is not financial advice. StockVolt and its authors may hold positions in securities mentioned.