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Chip Maker SK Hynix Posts Record Quarter as AI Memory Demand Overwhelms Supply
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SK Hynix reported record third-quarter results on Wednesday: revenue of 104.6 trillion won and operating profit of 83.3 trillion won. Revenue rose 328% year over year and operating profit 632%, an 80% margin. Quarterly sales topped 100 trillion won for the first time.
Net income was 39.8 trillion won, up 216% year over year but down 58% from the second quarter. CFO Kim Woo-hyun blamed 32.6 trillion won in non-operating expenses, led by an 11.6 trillion won currency loss and a 22.9 trillion won investment valuation loss. Operating profit beat analysts’ 77.5 trillion won forecast.
SK Hynix expects memory demand to outrun supply through 2030, with DRAM and HBM volumes through 2029 effectively sold out. DRAM is standard memory for servers, phones and PCs; HBM is stacked memory feeding AI processors. Kim cited leading-edge process complexity and new-fab lead times as persistent constraints.
Long-term agreements with 14 key customers, including global cloud providers, cover more than 50% of 2027 and 2028 capacity. The contracts typically run five years, allow prices within an agreed range and include deposit safeguards. SK Hynix expects investment to rise significantly in 2027, when its Yongin complex’s first phase enters full operation.
Citigroup analyst Peter Lee asked what supports AI investment confidence when monetization looks slow, after Citadel’s Ken Griffin warned eight days earlier of an AI bubble. CEO Kwak Noh-Jung said major cloud customers reported 30% to 80% revenue growth and backlogs up two- to five-fold. AI spending is broadening to non-tech firms, sovereign projects and on-prem setups.
Financing is tightening. Elon Musk wrote on Oct. 25 that debt markets have largely shut off money for firms without large non-AI revenue. SK Hynix expects weaker PC and smartphone demand from higher memory prices and tight supply, but says AI infrastructure demand should offset the decline.
