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/Yonahp

SK Hynix posted record-high earnings in the third quarter of this year, driven by the artificial intelligence (AI) boom.

SK Hynix announced in a regulatory filing on Oct. 28 that it recorded revenue of 104.6155 trillion won and operating profit of 83.3338 trillion won in the third quarter. Revenue increased 327.9% and operating profit rose 632.1% from a year earlier. Compared with the previous quarter, revenue and operating profit grew 31.9% and 37.6%, respectively. Quarterly revenue exceeded 100 trillion won for the first time.

The earnings improvement was largely attributed to rising prices of key products amid growing demand for AI memory. By product category, shipments of HBM4 gained momentum, while a sharp increase in sales of server DDR5 memory drove growth in the DRAM business. In NAND flash, sales of 321-layer TLC enterprise solid-state drives (eSSDs) also expanded, sustaining growth across high-value-added products for data centers.

"As AI leads to productivity improvements and creates new revenue opportunities, a virtuous cycle has taken hold in which increased AI usage drives further infrastructure investment," SK Hynix said. "AI investment is moving beyond the initial stage, when it depended on a small number of companies, and is expanding to businesses in general and national governments. We therefore expect the global AI data center infrastructure market to continue growing steadily."

The company also expects the memory market to maintain its growth trajectory, with enterprise and personal AI driving demand in the short term and physical AI applications, including autonomous driving and robotics, supporting demand over the medium to long term. On the supply side, however, SK Hynix expects a structural imbalance in which demand continues to exceed supply through 2030, as advanced manufacturing processes become increasingly technically challenging and new production facilities require lengthy construction periods.

Accordingly, the company plans to rapidly increase the share of its sixth-generation 10-nanometer-class (1c) manufacturing process and expand sales of DDR5 and LPDDR5 SOCAMM products for AI servers, further strengthening its DRAM portfolio with a focus on high-value-added products. To meet surging demand for HBM, it plans to maximize production capacity at its M15X facility by the end of the year and increase HBM4 output. In NAND, the company aims to raise the share of its flagship 321-layer process to more than half of its domestic production capacity in the fourth quarter, thereby expanding the supply of high-performance, high-capacity eSSDs.

According to SK Hynix, the volume secured so far under long-term agreements (LTAs) represents more than 50% of its total production capacity for 2027 and 2028. The company has signed LTAs with 14 major customers, including large global cloud service providers, and is proactively discussing extending the contract period beyond the usual five years with some customers.

Meanwhile, the company plans to return approximately 100 trillion won to shareholders this year. For fiscal 2026, the plan includes at least 30 trillion won in cash dividends and more than 60 trillion won in share repurchases and cancellations, including the 40 trillion won announced in August. Through these measures, the company intends to fulfill its commitment to return more than 50% of free cash flow (FCF) to shareholders. It completed the 40 trillion won share repurchase last week and plans to cancel the shares soon. The company also outlined its principles of determining dividends based on operating performance, providing additional returns through special dividends when substantial investment gains are realized, and continuing share repurchases every quarter.

At its board meeting that day, the company approved 14 trillion won in third-quarter cash dividends and 20 trillion won in share repurchases. Of the shares to be repurchased, 10 trillion won worth will be canceled in full for shareholder returns, while the remaining approximately 10 trillion won will be used for employee compensation and will not be included in the shareholder return amount. The third-quarter dividend will amount to 20,000 won per share, consisting of a 10,000 won dividend reflecting improved earnings and a 10,000 won special dividend to share gains from the company's investment in Kioxia.

                                                                                                            Yeon Chan-mo