SK Hynix Profit Jumps 632%, Returns 100 Trillion Won
SK Hynix posted record third-quarter results on Wednesday, with operating profit of 83.33 trillion won, and unveiled about 100 trillion won in shareholder…
SEOUL — SK Hynix announces $25 billion in dividends and buybacks alongside a record quarterly profit, a combination that sent its shares more than 8% higher on Wednesday. The South Korean chipmaker said third-quarter operating profit reached 83.33 trillion won, well above analyst forecasts.
Revenue came in at 104.62 trillion won ($78.86 billion), against 98.34 trillion won expected, according to LSEG SmartEstimates, which weight forecasts toward analysts with stronger track records. Operating profit beat an expected 76.72 trillion won. Sales topped 100 trillion won for the first time.
Growth against last year and last quarter
Revenue rose 327.9% from a year earlier, while operating profit climbed 632.1% year on year. Against the previous quarter, revenue was up 31.9% and operating profit gained 37.6%.
The stock outpaced the broader market. The Kospi gained 6.25% on the day, per CNBC's report.
About 100 trillion won for shareholders
The company plans to return about 100 trillion won to shareholders. That includes at least 30 trillion won in cash dividends and 60 trillion won in share buybacks and cancellations.
Its board approved a third-quarter dividend of 14 trillion won. A special dividend funded by gains from its investment in Japanese chipmaker Kioxia is part of that payout. CEO Kwak Noh-Jung said on the earnings call: "We intend to return the gains realized from our investment in Kioxia this year to our shareholders through a special dividend."
SK Hynix will also buy back 20 trillion won in shares, half of which will be cancelled this year. That follows a previously announced 40 trillion won buyback, completed last week, which will be cancelled shortly.
The company also plans to lift its shareholder return target to more than 50% of cumulative free cash flow generated between 2025 and 2027. It cited expectations that AI investment momentum will continue as AI services spread and the investor base widens.
Solidigm IPO review halted
Kwak said financial market volatility and a correction in semiconductor stocks were the main reasons the company stopped reviewing pre-IPO fundraising and IPO options for its U.S. subsidiary Solidigm. "Solidigm has concluded that an IPO would not fully deliver the anticipated benefits at this time," he said.
The company had earlier said it would keep assessing the timing, scale and financing options for Solidigm's growth.
Memory prices and HBM4 ramp
Demand is still running ahead of supply in memory, and SK Hynix expects that structural imbalance to continue for the time being. Average selling prices for DRAM rose by a high-20s percentage from the prior quarter. Higher conventional DRAM prices and a bigger share of pricier HBM4 sales drove the increase.
HBM, or high-bandwidth memory, is advanced memory used alongside AI processors to handle large volumes of data. HBM4, the sixth generation, began mass production and shipments in the third quarter. SK Hynix expects HBM4 to surpass HBM3E in both shipments and revenue in the fourth quarter as it ramps up output at its M15X facility in Cheongju, South Korea.
Shipments of server DDR5 chips, used in data center servers, rose more than 40% from the previous quarter, the company said on the call.
For investors and for customers building AI systems, the supply picture matters. SK Hynix said it has secured long-term agreements with 14 major customers covering more than 50% of its production capacity for 2027 and 2028. It expects memory demand to outpace supply through 2030 and plans to significantly increase investment next year.
Source: cnbc.com
