Hynix Shares Soar 8% as Record Profit Tops Estimates
SK Hynix posted record third-quarter results on Wednesday, with operating profit of 83.33 trillion won, above the 76.72 trillion won analysts expected. The…
SEOUL — Hynix shares soar 8% after the South Korean chipmaker reported record quarterly earnings on Wednesday and promised its investors one of the largest payouts in the memory chip industry. For buyers of AI hardware, the numbers point to supply that remains tight.
SK Hynix said third-quarter operating profit reached 83.33 trillion won, against 76.72 trillion won expected in LSEG SmartEstimates, which weight forecasts toward analysts with a more consistent record. Revenue came in at 104.62 trillion won ($78.86 billion), above the 98.34 trillion won forecast. Sales topped 100 trillion won for the first time.
Shares rose more than 8%, outpacing the Kospi's 6.25% gain.
Profit growth and payouts
Revenue rose 327.9% from a year earlier, while operating profit climbed 632.1%. Against the previous quarter, revenue grew 31.9% and operating profit 37.6%.
The company said it 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.
SK Hynix approved a third-quarter dividend of 14 trillion won, which includes a special dividend funded by gains from its investment in Japanese chipmaker Kioxia. 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."
The company 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 that finished last week and will be cancelled shortly.
SK Hynix also plans to raise its shareholder return target to more than 50% of cumulative free cash flow generated between 2025 and 2027. It cited expected continued momentum in AI investment, driven by wider adoption of AI services and a more diverse investor base.
Solidigm IPO put on hold
Kwak said financial market volatility and a correction in semiconductor stocks were the main reasons the company halted its review of 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," Kwak said. The company had earlier said it would keep assessing investment timing, scale and financing options for Solidigm's growth.
HBM4 ramps up, supply stays tight
The earnings point to a memory market where demand outpaces supply. SK Hynix expects that structural imbalance to continue for the time being.
High-bandwidth memory, or HBM, is advanced memory used alongside AI processors to handle large amounts of data. HBM4, the sixth generation, began mass production and shipments in the third quarter. SK Hynix expects it to surpass HBM3E in both shipments and revenue in the fourth quarter as it ramps up production at its M15X facility in Cheongju, South Korea.
Average selling prices for DRAM rose by a high-20s percentage from the previous quarter. The company credited higher conventional DRAM prices and a growing share of higher-priced HBM4 sales. Shipments of server DDR5 chips, used in data center servers, rose more than 40% from the prior quarter.
SK Hynix 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
