SK Hynix posted record Q3 results and stated that memory demand will outstrip supply through 2030, with over half of its 2027-2028 capacity already sold out.
South Korean chip manufacturer SK Hynix delivered its strongest quarterly performance to date, reporting third-quarter revenue of 104.6 trillion won, approximately $78 billion. This figure marks the first time the company’s quarterly sales have exceeded the 100 trillion won threshold. According to Decrypt, the revenue surge of 328% year-over-year was accompanied by an operating profit of 83.3 trillion won, representing a 632% increase. The company achieved an operating margin of 80%, indicating it retained roughly 80 won in profit for every 100 won in core business sales.
These results exceeded the 77.5 trillion won operating profit forecast by analysts surveyed by Bloomberg. While net income reached 39.8 trillion won, it declined 58% from the previous quarter due to significant non-operating expenses, including currency and investment valuation losses, as noted by CFO Kim Woo-hyun.
SK Hynix management stated that demand for memory chips is currently overwhelming available supply, a condition the company expects to persist through 2030. The firm indicated that its DRAM and high-bandwidth memory (HBM) volumes for 2029 are effectively sold out. HBM, which is critical for feeding data to AI processors, has seen customers adjust specifications to accommodate limited chip availability, a sign of intense market pressure.
CFO Kim Woo-hyun attributed the persistent supply constraints to the complexity of implementing leading-edge processes and the long lead times required to construct new production facilities. The company noted that customer volume requirements are more than double the current supply capacity, reinforcing the view that the shortage is structural rather than temporary.
To secure future revenue, SK Hynix has signed long-term agreements with 14 key customers, including major global cloud providers. These contracts, which typically span five years, cover more than 50% of the company's 2027 and 2028 production capacity. The agreements include price flexibility within agreed ranges and protective measures such as deposits, ensuring stable demand for the firm's advanced memory products.
CEO Kwak Noh-Jung addressed concerns about the sustainability of AI investment, noting that cloud revenue growth among major customers has ranged from 30% to 80% year-over-year. He highlighted that AI spending is broadening beyond big tech to include non-tech firms, sovereign AI projects, and on-premise setups, reducing reliance on a single segment of buyers.
The positive earnings report and supply outlook triggered a rally in related semiconductor stocks. BeInCrypto reported that Micron Technology and SanDisk shares rose significantly on Wednesday, following SK Hynix's forecast that memory demand would outpace supply until 2030. This narrative challenges earlier fears that the memory cycle might peak in 2028.
However, the rally cooled on Thursday as Microsoft and Alphabet reported capital spending below analyst estimates, and Samsung’s chip profits missed forecasts. Despite this, SK Hynix expects its investment to rise significantly in 2027 as the first phase of its Yongin chip complex enters full-scale operation. The company anticipates weaker demand from PC and smartphone makers due to higher memory prices but believes AI infrastructure demand will offset these declines.
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