SK hynix, the South Korean maker of memory chips used in artificial-intelligence servers, reported third-quarter operating profit of 83.3 trillion won on October 28, roughly seven times the figure of a year earlier, and said it will return about 100 trillion won, or roughly $75 billion, to shareholders in 2026. Bloomberg, in a report republished by Bloomberg Línea, described the newest tranche as an additional 60 trillion won, about $45 billion, on top of 40 trillion won announced earlier. SK hynix shares rose between 10% and 11% in Seoul on the day, depending on the report.

The results land at a time when memory has become one of the tightest parts of the AI supply chain, and when investors have been asking whether spending on AI can keep paying for itself. SK hynix’s answer was a set of numbers: record profit, supply sold out for years and a larger share of the cash going to owners.

The results

According to Reuters, operating profit for the July-to-September quarter was 83.3 trillion won, against 11.4 trillion won a year earlier. That beat the 76.7 trillion won average estimate compiled by LSEG. Bloomberg reported that the profit was more than 7% above forecasts, and a Bloomberg Intelligence analyst said both sales and operating profit beat consensus, by 6% and 8%.

Revenue was 104.6 trillion won, up 328% from a year earlier, and the first quarter in which SK hynix’s sales passed 100 trillion won, the Korea Times reported. The newspaper put the operating margin at about 80%. Euronews described it as the sixth straight quarter of record revenue and operating profit, with operating profit up 632%.

Dollar figures differ slightly between outlets because of exchange rates. Reuters used a rate of 1,326.09 won to the dollar, which works out to about $62.8 billion; Euronews and the Korea Times headline that figure, while Bloomberg’s report gives $62.5 billion. The sources opened for this article did not report a net profit figure.

The payout

The shareholder-return plan was foreshadowed. In early August, The Next Web reported that the company said it would introduce additional shareholder-return measures in the third quarter, without giving amounts. On October 28 it gave them, though the sources frame the total differently.

Reuters and the Korea Times describe a plan of about 100 trillion won for 2026, made up of more than 30 trillion won in cash dividends and more than 60 trillion won in buybacks and share cancellations, including 40 trillion won announced in August. Bloomberg describes the new element as 60 trillion won for the rest of the fiscal year through buybacks and dividends, in addition to the 40 trillion won announced earlier. Bloomberg said the split between buybacks and dividends was not given in its report.

The Korea Times supplied more detail. The third-quarter cash dividend is 14 trillion won, or 20,000 won a share. The board approved a new buyback of 20 trillion won, of which 10 trillion won will be used to repurchase and cancel shares and 10 trillion won for employee compensation, which sits outside the return plan. Shares from the recently completed 40 trillion won buyback are due to be cancelled soon, and the company said it will keep buying back stock each quarter within its annual plan. The company said its shares are undervalued, according to the newspaper.

Part of the cash comes from Kioxia, the Japanese memory maker in which SK hynix held a stake. Reuters said a special dividend will return most of the gain from that investment; Bloomberg said much of the 60 trillion won comes from gains on the early-2026 sale of Kioxia shares. Ryu Young-ho, an analyst at NH Investment & Securities quoted by Reuters, said the buyback and cancellation plan should effectively raise the value of each remaining share.

Why the company says demand will last

SK hynix told investors that its supply of high-bandwidth memory, the stacked chips that sit next to AI processors, and of conventional DRAM is committed through 2029, and that the shortage of chips will likely last through 2030, according to Reuters. The company said demand for high-bandwidth memory is about twice what it can produce. Reuters, citing Nomura data, said SK hynix holds almost half of the high-bandwidth memory market.

Long-term agreements with 14 major customers cover more than half of SK hynix’s production capacity for 2027 and 2028, Reuters reported, and such contracts typically run five years. The Korea Times said the company expects its next-generation HBM4 chips to overtake the previous generation in shipments and revenue in the fourth quarter, and plans to bring a new plant, known as M15X, to full capacity by the end of the year. Reuters said it plans to raise capital spending significantly next year.

Bloomberg reported that executives said the shortage of components critical to Nvidia’s AI accelerators will likely last at least until 2030, and that the company has prioritized long-term contracts, notably with Nvidia. It cited Macquarie’s estimate that memory makes up about one-third of AI data-center spending and that prices of high-bandwidth memory will more than double in 2027. That is an analyst’s forecast, not a company figure.

Chief financial officer Kim Woo-hyun acknowledged that investors are scrutinizing the feasibility and profitability of AI projects but said, “We expect AI investment momentum to continue,” Reuters reported. Ryu said fourth-quarter operating profit could approach 100 trillion won because the fourth quarter is usually stronger.

What the market made of it

The shares had been under pressure. Bloomberg noted that most chip stocks have fallen since late June amid concern about an AI bubble, and the Korea Times said SK hynix stock fell 18.8% between September 1 and October 27, from 1,693,000 won to 1,374,000 won, before rising four sessions in a row. Reuters said the shares have more than doubled this year.

Jung In Yun of Fibonacci Asset Management Global told Bloomberg that the announcement helps dispel two worries at once: whether AI demand will last and how much of the windfall will reach shareholders. Euronews reported that the move helped lift Asian technology shares on October 28, with Samsung Electronics up more than 8%, the Kospi up more than 6% and the Nasdaq up more than 1%. Stephen Innes of SPI Asset Management told Euronews that while Wall Street debates whether AI spending can fund itself, “somebody on the other side of all that capex is receiving the cheque.”

The Korea Times also reported that SK hynix’s Solidigm unit abandoned a planned initial public offering, announced the Friday before. The unit’s chief executive, Kwak Noh-jung, said an offering now would not deliver the benefits originally expected.

The squeeze beyond the data center

Memory’s shortage is also felt outside data centers. The Korea Times reported, citing IDC, that global smartphone shipments fell 7.4% in the second quarter because of memory shortages, as chipmakers shift production toward server memory and high-bandwidth memory. Samsung Electronics, which is also a large memory maker, said in preliminary figures on October 8 that third-quarter operating profit was 107.4 trillion won on revenue of 195 trillion won, the first time a Korean company has reported more than 100 trillion won in a quarter. The Next Web reported that Samsung posted a record quarterly profit on Thursday, October 29, when it published final results.

On the same day, a podcast interview with OpenAI chief executive Sam Altman was released in which he discussed the same shortage. The Next Web reported that Altman, speaking to Stripe co-founder John Collison on the show Cheeky Pint, said memory makers are each going to make something like $100 billion of free cash flow in a year and that their history of near-bankruptcies from overbuilding keeps them cautious about adding capacity. He also argued that it is a poor use of the world’s limited DRAM for it to sit in home computers used about 5% of the time, an argument aimed at people who want to run AI models locally.

Engadget, reporting on the same interview, said many people may find the remark tone-deaf from the head of a company that, according to an Open Markets Institute newsletter it cited, has tied up roughly 40% of the world’s RAM output through agreements. That figure comes from a newsletter relayed by Engadget and was not independently confirmed. The Next Web reported that Altman met about 50 Samsung executives at a training center in Yongin on Saturday, October 31, in a session Samsung said covered AI trends and management skills. Samsung did not publish what he said, and the report did not say that memory supply was discussed.

What to watch

Reuters reported that China’s CXMT plans to begin producing HBM3E chips within two months, although as little as 20% of its output may be usable. That would be an early test of whether the shortage draws in new competitors, even though SK hynix itself says the shortage will likely last through 2030.

Lens analysis: the combination of a larger payout and higher capital spending shows the company is planning for both outcomes. It is returning cash at a record pace while telling customers it will build more capacity. The risk the company and its investors are weighing is the one that The Next Web pointed to in August, that memory has always been a boom-and-bust business, and the long-term contracts, which cover more than half of capacity for two years, are the main protection against a bust. Whether those contracts hold if AI spending slows has not been tested.

The next data points are the fourth-quarter results from SK hynix and Samsung, which Ryu expects to be stronger still, and whether customers extend their long-term contracts, which Reuters said SK hynix is discussing.

Sources

Image: SK Hynix SOCAMM module Computex 2025.jpg by 4300streetcar, CC BY 4.0, via Wikimedia Commons. Illustrative photo; it does not show the events described.