SK hynix posts historic 100 trillion won revenue as AI demand keeps its DRAM and HBM chips booked through 2029. The company also announced expanded shareholder returns following record-breaking operating profits in the third quarter.
SK Hynix Reports Historic Financial Performance
South Korean semiconductor firm SK hynix saw its DRAM and high-bandwidth memory chips effectively sell out through 2029 on sustained artificial intelligence demand, as the firm registered historic quarterly earnings with revenue crossing 100 trillion won (~USD 74.64 billion) for the first time, according to a news report by The Korea Herald. The memory manufacturer also introduced further shareholder returns, lifting its planned dividends along with share repurchases and cancellations for the year to around 100 trillion won (~USD 74.64 billion).
During the third-quarter earnings call, Chief Executive Officer Kwak Noh-jung addressed investors directly regarding the company’s capital allocation framework. “Our principle has been to share most of the gains with shareholders when our strategic investments bear fruit,” the news report quoted Kwak. “The gains would help replenish funds available for shareholder returns when investment in future growth temporarily constrains them,” he added, noting that this approach allowed the enterprise to “continue investing boldly in sustainable growth while protecting shareholder interests.”
Record Profitability and Production Outlook
Operating profit rose 632.1 per cent year-on-year to 83.33 trillion won (~USD 62.22 billion) for the July-September period, exceeding market projections of 77 trillion won (~USD 57.47 billion), according to the news report. Revenue reached 104.62 trillion won (~USD 78.09 billion), marking a 327.9 per cent increase, while net profit touched 39.78 trillion won (~USD 29.69 billion). The quarterly operating margin stood at 79.7 per cent.
The performance stemmed from expanding sales of HBM4 chips and server DDR5 units. Supply commitments indicated that DRAM and high-bandwidth memory allocations remained booked through 2029 under secured contracts and advanced customer negotiations. Signed pacts covered upwards of 50 per cent of production capacity for 2027 and 2028, with the firm retaining the remaining output to adapt to market shifts.
Market Demand and Strategic Capital Management
“Customers are requesting more than twice the volume we can supply,” the news report quoted Kim Ki-tae, head of HBM sales and marketing at SK hynix. “Our medium- to long-term HBM demand outlook remains unchanged,” Kim said, adding that HBM4 would surpass HBM3E in shipment volume and revenue share in the fourth quarter.
Addressing market valuation, Chief Financial Officer Kim Woo-hyun highlighted the firm’s ongoing capital management initiatives. “The current share price does not fully reflect our earnings and cash flow,” Kim said. The board cleared an additional 20 trillion won buyback, half of which faced cancellation for returns, alongside a third-quarter dividend of 20,000 won per share, backed by returns from Japanese flash memory producer Kioxia.
Examining wider industry requirements, DRAM marketing head Park Joon-deok projected memory deficits through 2030 because of intricate fabrication steps and extended factory setup schedules. “Major customers’ AI revenue and cash flow will continue improving, easing concerns over their investment burden,” Park said. “Tangible business results and a broader range of investors will sustain AI investment and demand, with memory demand continuing to far outstrip supply,” he stated.
Meanwhile, the company deferred an initial public offering on the Nasdaq for its NAND unit Solidigm amid financial environment assessments, according to a news report by The Korea Herald. “Considering recent financial market conditions and other factors, we concluded that it would be difficult to fully achieve the anticipated benefits at this point,” Kwak said. (ANI)
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