SK Hynix Posts an 80% Margin and Says Memory Shortage Will Last Until 2030

Keypoints:

• SK Hynix reported third quarter operating profit of 83.33 trillion won, about $58 billion
• That is up 632% from a year earlier, with an operating margin of 80%
• Revenue topped 100 trillion won for the first time, reaching 104.62 trillion won
• The company expects memory demand to exceed supply through 2030
• It plans about 100 trillion won in shareholder returns this year

South Korean chipmaker SK Hynix just posted numbers that are hard to believe. In the three months to September, it made 83.33 trillion won in operating profit, which is roughly $58 billion. A year earlier it made about one seventh of that.

Revenue reached 104.62 trillion won, up 32% from the previous quarter and 328% from a year ago. It was the first time SK Hynix sold more than 100 trillion won in a single quarter. Analysts had expected about 76.7 trillion won in operating profit and 98.3 trillion won in revenue, so the company beat both. Its operating margin hit 80%, meaning it kept about 80 won in profit from every 100 won it sold.

The reason is the AI boom. AI systems need a special kind of fast memory called HBM, and SK Hynix is one of the leading makers. Prices for memory have also climbed because demand keeps running ahead of supply. The company says that gap is not going away soon. It expects demand to exceed supply through 2030, and it has long term agreements that cover more than half of its 2027 and 2028 output.

Net profit looked weaker at 39.78 trillion won, down 58% from the previous quarter. That drop came from non-operating items like currency losses and a loss in the value of its investments, not from the chip business itself.

Shareholders are getting a big reward. SK Hynix plans about 100 trillion won in returns this year, including at least 30 trillion won in dividends and at least 60 trillion won in share buybacks. The third quarter dividend is 20,000 won per share, which includes a special payout from gains on its stake in Kioxia.

Markets cheered. SK Hynix shares closed 10.9% higher in Seoul and the broader Kospi index jumped 6.63%. Its US-listed shares rose more than 13%. By operating profit, SK Hynix now ranks third among global tech companies, behind only Samsung Electronics and Nvidia.

It is a strong sign that the AI chip trade is still running hot. The risk, as always, is that all of this depends on AI spending staying strong.