SK Hynix Earnings Top 100 Trillion Won in Revenue as AI Memory Lifts Margin to 80%

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SK hynix earnings for the third quarter of 2026 set another record, as demand for memory chips used in artificial intelligence data centers pushed the South Korean company’s revenue above 100 trillion won in a single quarter for the first time. In its results released Wednesday, Oct. 28, SK hynix reported revenue of 104.62 trillion won and operating profit of 83.33 trillion won, an operating margin of 80%.

Revenue rose 32% from the second quarter and 328% from a year earlier. Operating profit rose 38% from the previous quarter and 632% year over year, according to the company. It was the first time in the company’s history that quarterly revenue topped 100 trillion won.

What drove SK hynix’s record quarter

SK hynix makes DRAM and NAND flash memory, but the center of its business is now high-bandwidth memory, or HBM, the stacked DRAM that sits next to AI accelerators from Nvidia and others. The company said HBM4 shipments “began in earnest” during the quarter and that it expects HBM4 to surpass HBM3E in both shipment volume and revenue in the fourth quarter. DRAM results were also driven by a significant increase in sales of server DDR5, and in NAND, sales of 321-layer enterprise solid-state drives expanded. SK hynix plans to raise its 321-layer process to more than half of its domestic NAND production capacity in the fourth quarter.

The company described a market where supply, not demand, is the constraint. SK hynix said it has signed long-term agreements with 14 customers that cover more than half of its capacity for 2027 and 2028, and that it expects memory shortages to continue through 2030. It plans to ramp its M15X fab to maximum capacity by the end of the year to increase HBM4 production, and said investment is expected to increase significantly next year as the first phase of its Yongin site enters full-scale operation.

“The customer trust built through our technological competitiveness is leading to long-term contracts, and our business structure is transforming into one with earnings stability and mid-to-long term demand visibility,” chief executive Kwak Noh-Jung said in the release.

The data: a year of compounding growth

The quarterly numbers show how quickly the business has scaled. One year ago, in the third quarter of 2025, SK hynix posted revenue of 24.45 trillion won and operating profit of 11.38 trillion won. Revenue has since more than quadrupled, and operating profit has grown more than sevenfold.

Profitability has risen alongside sales. By The Boston Report’s calculations, operating margin climbed from about 47% in the third quarter of 2025 to 58% in the fourth quarter, 72% in the first quarter of 2026, 76% in the second quarter and 80% in the latest quarter. Margins that high are unusual for a hardware manufacturer and reflect how tight the market for AI memory has become.

Net profit, which includes non-operating items, was 39.78 trillion won, a net margin of 38%. That was down 58% from 93.92 trillion won in the second quarter, according to the company’s results table, but up 216% from a year earlier. The balance sheet is strong: SK hynix reported cash of 114.5 trillion won against borrowings of 15.8 trillion won, leaving net cash of about 98.7 trillion won.

Shareholder returns and the Solidigm decision

SK hynix said total shareholder returns for 2026 will come to about 100 trillion won, including cash dividends of 30 trillion won or more and share repurchases of 60 trillion won or more, counting the 40 trillion won announced in August. For the third quarter, it declared a dividend of 14 trillion won, or 20,000 won per share, which includes a special dividend of 10,000 won per share tied to gains from its stake in Japan’s Kioxia. It also announced a 20 trillion won buyback, with about half of the shares to be cancelled and the rest used for employee compensation.

The company also said it has stopped reviewing an initial public offering for Solidigm, its U.S.-based NAND and SSD subsidiary. “The IPO was intended to raise external capital for the expansion of Solidigm’s production facilities,” Kwak said, adding that “after carefully considering recent financial market conditions and other factors, we concluded that proceeding at this time would not be the best way to achieve the originally anticipated outcome.” SK hynix said the shareholder return plan is meant to fulfill its commitment to return 50% or more of free cash flow, and that the 40 trillion won buyback announced in August was completed last week.

Market reaction in Seoul

South Korea’s main stock index, the KOSPI, jumped more than 6% on Oct. 28 as investors bought chip stocks around the results, according to Yonhap News Agency. On Thursday, Oct. 29, the KOSPI gave back 1.24% to close at 5,937.66, dragged down by Samsung Electronics, which fell 4.13% after its own results disappointed investors on shareholder returns, Yonhap reported. SK hynix shares bucked the decline, rising 2.62% to 1,526,000 won.

The contrast is notable because Samsung reported third-quarter operating profit of 107.44 trillion won, larger than SK hynix’s, according to Yonhap.

Why it matters beyond Korea

Memory has become one of the main bottlenecks in the AI build-out. The same week SK hynix reported, Alphabet and Microsoft disclosed tens of billions of dollars in quarterly capital spending, much of it on servers that rely on HBM. For more on the chip supply chain, see our map of new U.S. chip plants and AI chip production in 2026 and our Oct. 27 business report on the chip rally.

Sources

• SK hynix Newsroom: SK hynix Announces 3Q26 Financial Results
• PR Newswire: SK hynix Announces 3Q26 Financial Results
• SEC: SK hynix Form 6-K
• Yonhap News Agency: Seoul shares down 1.24 pct as Samsung disappoints on shareholder returns