Seoul: SK hynix Inc. announced on Wednesday that its operating profit for the third quarter exceeded 10 trillion won (US$6.97 billion), fueled by strong performance in the high bandwidth memory (HBM) sector, a crucial component for artificial intelligence (AI) infrastructure.
According to Yonhap News Agency, the South Korean chipmaker achieved an operating profit of 11.38 trillion won during the July-September period, a significant increase from the 7.02 trillion won recorded a year ago. This marks the first instance of SK hynix posting a quarterly operating profit surpassing 10 trillion won. The company's net profit more than doubled to 12.59 trillion won in the same period, with revenue rising 39.1 percent to 24.44 trillion won. These figures exceeded market expectations, as analysts had predicted an average net profit of 8.84 trillion won, based on a survey by Yonhap Infomax.
SK hynix attributed its growth to rising global prices of dynamic random access memory (DRAM) and NAND flash, alongside a robust demand for high-end products within the AI server industry. The company's successful performance was further bolstered by increased sales of high value-added products such as 12-high HBM3E and DDR5 for servers. Demand for AI servers has led to a significant rise in shipments of high-capacity DDR5s of 128GB or more, doubling from the previous quarter.
The company highlighted its completed discussions with key customers, including Nvidia Corp., for HBM supply in 2026. The newly developed HBM4, which entered mass production in September, is said to meet customer performance requirements and supports industry-leading speeds. SK hynix plans to commence HBM4 shipments this year, with a full-scale expansion anticipated in 2026.
According to separate data compiled by Counterpoint Research, SK hynix dominated 64 percent of the global HBM market sales in the second quarter, outpacing competitors Micron and Samsung Electronics Co., who accounted for 21 percent and 15 percent, respectively. As of the end of the third quarter, SK hynix's cash assets totaled 27.9 trillion won, with net cash standing at 3.8 trillion won after accounting for its 24.1 trillion won debt.
During a conference call, SK hynix expressed expectations for a continued "tight" supply of HBM, citing the memory industry's entry into a "super cycle." The company noted that demand for HBM has surged, driven by AI industry's medium- and long-term growth, outstripping supply in the short term. The HBM lineup, representing 20 percent of total DRAM shipment volume, is estimated to have contributed approximately half of the operating profit.
Despite the record earnings, SK hynix stated it is not considering additional returns to investors, opting instead to maintain an adequate cash reserve to adapt to market changes and sustain competitiveness. The company emphasized the growth potential of the AI memory market and the importance of reinvesting returns into the business for long-term investor benefits.
SK hynix shares closed at a record high of 558,000 won, a rise of 7.1 percent, outperforming the main bourse's 1.76 percent gain. The third-quarter report was released before market hours.