Published time: Oct 28, 2026 08:49 GMT
SK Hynix announced sales of 104.6155 trillion won and operating profit of 83.3338 trillion won in the third quarter of 2026. It's the first time in the company's history that quarterly sales exceeded 100 trillion won. As the demand for memory entering AI servers overlaps with the increase in product prices, the revenue structure has changed dramatically.
If you look at this announcement as a simple performance record, you will miss an important part. HBM4 sales expansion, DDR5 for servers and demand for enterprise SSDs, long-term supply contracts, and large shareholder return plans were presented at once. The key is not only the fact that the performance was high, but also how reliably sales can be secured in the future.
| Composition of greatest performance ever
According to official data, net profit in the third quarter was 39.7756 trillion won. Compared to the same period last year, sales increased by 328% and operating profit increased by 632%, and the operating profit margin was about 80%. Compared to the previous quarter, sales increased by 32% and operating profit by 38%. What these numbers mean is that not only was the shipment increased, but the price of the product and the share of the high-value product simultaneously raised profits.
However, it cannot be concluded that the operating profit margin can remain the same in the future. Semiconductor is an industry where profitability varies greatly depending on product price, production yield, and customer investment plan. We can look at this record as the starting point for a sustainable revenue structure, but we need to look at whether the same trend continues in the next quarter.
| HBM4's flagship product switch
HBM is a high-bandwidth memory that increases the amount of data transferred by stacking several memory chips. Even if a large AI accelerator calculates quickly, it has become more important because if the memory does not supply enough data, the overall performance will decrease. SK Hynix said that HBM4 shipments intensified in the third quarter and that it expects to surpass HBM3E in both shipments and sales in the fourth quarter.
The main thing to note here is the speed of product generation change. The step of adopting the new standard into the actual system and the step of increasing the production volume together can lead to an increase in sales. The company also proposed to raise the M15X production capacity to the maximum by the end of the year. This is a plan of realization, but it doesn't mean that the target production has already been completed.
| Complementary growth of memory and SSD for servers
The background of this performance is not explained by one HBM. The company separately mentioned increased sales of DDR5 for servers and increased sales of 321-speed TLC NAND-based enterprise SSDs. The AI infrastructure needs not only high-speed memory used for learning, but also a large amount of memory to store data and handle general tasks on the server. So it's a structure where multiple product groups can be benefited at the same time.
Unlike personal storage, enterprise SSDs are an important buying criteria for sustained throughput, reliability, and cost-per-capacity. SK Hynix plans to increase the share of the 321-speed process in the domestic NAND production capacity to more than half in the fourth quarter. It depends on corporate customer demand and sales price, where increasing production weight leads to real profitability improvement.
| Long-term supply agreements with 14 customers
SK Hynix has signed long-term supply contracts with 14 major customers, and explained that the volume secured exceeds 50% of the total production capacity in 2027-2028. Major global cloud providers are also included in the customer. Long-term contracts can be a more important clue than short-term performance because they increase the predictability of demand needed to grow the plant.
It doesn't mean it's a one-size-fits-all contract. The company said it has adopted a structure that reflects market conditions within the agreed price range. Rather than completely eliminating price risk, it's about making room for price fluctuations while still securing demand. It should be distinguished that the quantity acquired does not mean the same as the sales confirmed sales or cash received.
| Supply shortage forecast to 2030
Due to the increasing difficulty of advanced process technology and the time-consuming construction of new production facilities, the company forecast that demand will continue to exceed supply by 2030. I heard against the background of the possibility that the adoption of AI will expand beyond some large technology companies to general enterprises and national businesses. But this prospect is a market judgment of the company, not a fact of the future that has already been confirmed.
The expression of insufficient supply in the memory market does not mean that all products will be insufficient at the same rate. HBM, general purpose DRAM, and NAND have different equipment structures with different customers and prices. Therefore, in the future, HBM4 production expansion, customer-specific demand, and DDR5 and SSD prices are more accurate than just looking at the overall market outlook.
| Yongin Production Base and Investment Execution
SK Hynix mentioned the full operation of the Yongin Phase 1 facility next year and investment in infrastructure at home and abroad. As we have secured some demand through long-term supply contracts, the basis for promoting the expansion of production capacity has been strengthened. At the same time, the company explained that it would flexibly adjust the execution size and timing in consideration of customer demand, profitability, and investment efficiency.
Announcement of the operation of the semiconductor factory and stable mass production are different stages. Equipment import, process verification, yield stabilization, and customer certification are all required. If the investment plan grows, the supply does not immediately increase to the same extent. You need to determine when supply expansion is reflected in actual sales to determine the connectivity of long-term contracts and equipment investments.
| Refinement of Special Dividends and Treasury Stock Reductions
The company said it is promoting a shareholder return of approximately KRW 100 trillion in 2026. It includes more than 30 trillion won of cash dividends and more than 60 trillion won of treasury stock purchases and incinerations. The board of directors resolved a cash dividend of 14 trillion won in the third quarter and 20 trillion won in the purchase of treasury shares. The dividend per share of 20,000 KRW includes 10,000 KRW per special dividend that shares KIOXIA investment profits.
The key point is that the profits from operations and the profits from investment assets were also reflected in the return policy. However, the announced annual total includes the implementation plan and completed actions. Unlike the review theory reported earlier, there is a difference that the items resolved by the board were disclosed this time. You have to see the execution completion history separately.
| Condition of persistence to check for next quarter
This performance shows how AI infrastructure competition can significantly change the economics of the memory business. The most important change is that the HBM4 generation replacement, long-term contract, and expanding the memory for the server are going on at the same time. To sustain the high profit margin, customers must actually order the promised demand, and the quality and productivity of the new production line must be stable.
The indicators to check in the future are HBM4's Q4 revenue share, the actual shipment conversion of the contract from 2027 to 2028, the mass production progress of Yongin and M15X, and the execution history of shareholder reimbursement. It is reasonable to verify the sustainability of this growth through these specific numbers and implementation situations rather than looking at the overall supply shortage forecast of the industry as a matter of fact.
References
SK Hynix — Official Q3 2026 Earnings Release
