SK hynix quarterly revenue tops 100 trillion won for the first time... “Memory supply to fall short through 2030”

[Financial News] SK hynix posted its highest-ever earnings after quarterly revenue topped 100 trillion won for the first time, driven by growing demand for AI memory and increased sales of high-value-added products. The company plans to secure mid- to long-term demand by signing long-term supply agreements with 14 major customers and to accelerate efforts to expand production capacity. It also plans to return around 100 trillion won to shareholders this year in line with its earnings growth.

SK hynix said on the 28th that it recorded revenue of 104.6155 trillion won, operating profit of 83.3338 trillion won and net profit of 39.7756 trillion won in the third quarter of this year. Revenue and operating profit surged 327.9% and 632.1%, respectively, from the same period a year earlier. 
Revenue and operating profit both reached record highs for a quarter. Revenue, in particular, topped the 100-trillion-won mark for the first time. The operating margin stood at 80%. FnGuide, a financial information provider, had previously compiled consensus estimates for SK hynix's third-quarter results of 98.2257 trillion won in revenue and 76.964 trillion won in operating profit.
By product, the ramp-up in HBM4 shipments and a sharp increase in server DDR5 sales drove growth in DRAM earnings. In the NAND business, sales of 321-layer TLC eSSDs also rose, sustaining growth across high-value-added products for data centers.
On the back of strong earnings, SK hynix's cash and cash equivalents totaled 114.5 trillion won at the end of the third quarter, up 26.5 trillion won from the end of the previous quarter. Meanwhile, borrowings fell by 2.8 trillion won over the same period to 15.8 trillion won, bringing net cash to 98.7 trillion won.


SK hynix said it had signed long-term supply agreements (LTAs) with 14 major customers, including major global cloud service providers (CSPs). It is also discussing with some customers the possibility of extending the contract period beyond the customary five years.
The volumes secured under long-term supply agreements currently account for at least 50% of total production capacity in 2027 and 2028. Prices are structured to reflect market conditions within a range agreed upon with customers. The company said the agreements would allow it to secure stable mid- to long-term demand while also improving its ability to respond to market changes. 
SK hynix said it would be difficult for memory supply to keep pace with demand growth as leading-edge process technology becomes more challenging and the construction of new production facilities takes a long time. It forecast that demand would continue to outstrip supply through 2030.
The company will also move to expand production capacity to meet this demand. Investment is expected to rise significantly from this year as infrastructure investment at home and abroad expands, including the start of full-scale operations at the first Yongin fab next year. However, the company plans to adjust the scale and timing of investment flexibly, taking into account customer demand, product competitiveness, profitability and investment efficiency.


SK hynix plans to return around 100 trillion won to shareholders this year in line with its earnings growth. Under its plan, based on fiscal 2026, it will return at least 50% of its free cash flow (FCF) to shareholders through cash dividends of at least 30 trillion won and share buybacks and cancellations of at least 60 trillion won.
The share buyback and cancellation total includes the 40 trillion won announced last August. The buyback was completed by last week, and the shares are to be canceled soon.
At a board meeting that day, the company approved a third-quarter cash dividend of 14 trillion won and a share buyback of 20 trillion won. Of the shares to be repurchased, the 10 trillion won allocated for shareholder returns will all be canceled. The remaining approximately 10 trillion won is for employee compensation and is not included in the shareholder-return total.
The third-quarter dividend is 20,000 won per share. It consists of a 10,000-won dividend reflecting improved performance and a 10,000-won special dividend tied to returns on the Kioxia investment. The company said it would return most of the profits realized from its Kioxia investment this year to shareholders.
SK hynix emphasized, “We will continue to deliver stable results on the strength of solid growth in memory demand and our technological competitiveness, and consistently share those results with our shareholders.”


[email protected] Park Ji-yeon Reporter