The Nvidia memory supplier beat expectations by more than 6 trillion won as HBM4 moves toward the center of its product mix.SK hynix reported record third-quarter revenue of KRW104.62 trillion and operating profit of KRW83.33 trillion, an operating margin of 80%, according to its official Q3 results announcement. Operating profit rose 38% from the previous quarter and 632% from a year earlier, surpassing the roughly KRW76.96 trillion consensus compiled by FnGuide and reported by MT by about KRW6.37 trillion.The result puts the supplier of high-bandwidth memory (HBM) for Nvidia at the center of a broader debate about how much further the AI-driven memory cycle can run. Investors will compare the pricing and capacity signals with Micron, Sandisk and Samsung Electronics, while watching whether HBM4 becomes the next major growth engine or simply replaces HBM3E in a market still constrained by supply.
Revenue and operating profit outpace the forecast
Revenue increased 32% quarter on quarter and 328% year on year. Operating profit advanced faster, climbing 38% sequentially, which lifted the margin to 80%. The gap between the sales growth and profit growth reflects both strong demand for high-value memory and the benefits of selling into markets where supply remains tight. SK hynix also ended the quarter with KRW98.7 trillion in net cash, giving it room to fund capacity investment and distributions.There is a headline caveat: net profit fell 58% from Q2 to KRW39.78 trillion, even as it rose 216% year on year. That decline does not signal a reversal in the core memory business. Q2 net income was unusually high because it included substantial gains on investment assets, including gains associated with the company’s Kioxia investment. Q3’s operating profit, by contrast, continued to rise. The distinction matters when comparing the underlying operating trend with the bottom-line figure.
HBM4 and server memory shape the next phase
The company said HBM4 shipments began in earnest during Q3 and expects HBM4 to overtake HBM3E in both shipments and revenue in the fourth quarter. That forecast marks a shift in the product mix rather than a claim that HBM3E demand has disappeared. Customers are moving to a newer generation as AI accelerator platforms advance, while SK hynix is positioning its production and qualification work to capture that transition.Server DDR5 also contributed to the quarter, with sales rising significantly as operators add capacity for AI and conventional cloud workloads. The company reported higher sales of 321-layer TLC enterprise solid-state drives as well. It expects its M15X facility to reach maximum capacity by year-end. Taken together, HBM, server DRAM and enterprise storage broaden the earnings story beyond one product, though HBM4’s ramp is likely to draw the most attention from investors.SK hynix expects memory supply constraints to persist through 2030, citing the pace of AI infrastructure investment, longer lead times and the complexity of adding advanced production. It said long-term agreements with 14 major customers cover more than half of its production capacity for 2027 and 2028. These arrangements provide planning visibility, while allowing prices to reflect market conditions within agreed ranges. They do not eliminate exposure to changes in demand, customer timing or competition.
A roughly 100 trillion won shareholder-return commitment
SK hynix plans shareholder returns of about KRW100 trillion for 2026, comprising more than KRW30 trillion in dividends and more than KRW60 trillion in share repurchases and cancellations. The company declared a Q3 dividend of KRW20,000 per share, including a KRW10,000 special dividend tied to gains from its Kioxia investment. The scale of the return plan is striking alongside the company’s investment needs, but its net cash position gives it a substantial financial buffer.The results also come as the market tracks the company’s other strategic decisions. FinanceFeeds recently reported that SK hynix paused the planned listing of Solidigm; that backdrop makes capital allocation and the balance between expansion and shareholder distributions relevant questions for investors.
What the result says about peers and Q4
The earnings beat supports the view that tight supply and strong AI-related demand are still feeding through to memory pricing and margins. It is not, on its own, a forecast for Micron or Sandisk: product mix, customer exposure and production ramps differ. Sandisk’s Thursday results should offer another read on NAND demand and pricing, while Samsung Electronics’ next update will help investors assess how broadly the favorable conditions extend across the industry.SK hynix shares were up 7.76% in Seoul at 11:20 a.m. local time after the results, according to Yonhap, as investors responded to the earnings and outlook. The next tests are whether Q4 HBM4 shipments and revenue surpass HBM3E as projected, whether M15X reaches its planned capacity, and whether contract coverage and pricing support margins as supply expands.Takeaway: SK hynix delivered an operating result well ahead of expectations, with record sales, an 80% margin and a clear HBM4 transition plan. The sequential drop in net profit reflects Q2’s exceptional investment gains, not a fall in Q3 operating profit. For the next leg of the memory cycle, investors will look for proof that HBM4, server DDR5 and disciplined capacity additions can sustain pricing while the company returns about KRW100 trillion to shareholders.Related: SK hynix stock rises as Solidigm listing plans are paused
