Unlock Editor’s Digest for free
Roula Khalaf, editor-in-chief of the FT, selects her favorite stories in this weekly newsletter.
SK Hynix reported better-than-expected quarterly earnings on Wednesday as booming demand for AI infrastructure showed no signs of slowing and continued to drive sales of its advanced memory chips.
Operating profit rose 38 percent to 83.33 billion won ($62.5 billion) in the three months ended Sept. 30 from the previous quarter, 8.6 percent higher than the 76.7 billion won forecast by LSEG SmartEstimate. Revenue rose 32 percent to 104.62 billion won.
SK Hynix said its performance reflected rising memory prices and increased sales of higher-value products such as high-bandwidth memory (HBM).
The company will also return about 100 trillion won ($75 billion) to investors this year after announcing dividends and buybacks worth another 60 trillion won.
Hynix struck a positive tone during its conference call, saying its DRam and high-bandwidth memory production was sold out through 2029 and forecasting a big increase in HBM’s revenue next year.
Executives also expected revenue and cash flow from key AI customers to improve, supporting continued infrastructure investment.
Hynix shares jumped 9 percent following the results, but remain down 17 percent over the past month following recent swings in the AI trade.
South Korea’s Kospi gained more than 6 percent, paring its losses from last month to 13 percent. The chipmaker makes up about a fifth of the index. Its rival Samsung Electronics also gained more than 8 percent on Wednesday.
Some content could not be loaded. Check your Internet connection or browser settings.
Some calm returned to AI trading this week following Anthropic’s blockbuster IPO filing on Monday, with the Nasdaq 100 closing up 1.3 percent on Tuesday, adding to a 1.1 percent rise on Monday.
Peter Kim of KB Securities in Seoul said Hynix’s results confirmed its momentum. “However, the stock market and AI sector are focused on next year and beyond rather than current results due to concerns about the sustainability of AI spending and a more challenging financing environment,” he added.
Hynix said its operating margin rose to 79.7 percent, putting it alongside U.S. rival Micron, which reported an 80.7 percent margin in its most recent quarter.
However, net profit fell 57.7 percent from the previous quarter to 39.78 billion won. The second quarter was helped by a sharp rise in the share price of Kioxia, the Japanese memory chip maker in which SK Hynix acquired a stake in 2018.
Hynix was optimistic about future memory demand, predicting continued shortages through 2030 as AI adoption expands beyond large tech companies to the broader enterprise sector and national projects.
“A virtuous cycle has taken hold in which AI-driven productivity gains and new revenue generation in areas such as software development, customer service and research lead to greater adoption of AI, which in turn leads to increased investment in infrastructure,” the company said.
Hynix also said long-term agreements with 14 major customers now cover more than half of production capacity for 2027 and 2028.
Asked by analysts about a future glut in the event of a cyclical downturn, executives said they would build new chip factories ahead of demand, but would install equipment and increase production in stages, allowing expansion to slow if market conditions weaken.
Last week, SK Hynix halted the U.S. listing of its California-based flash memory subsidiary Solidigm, whose chief executive Kwak Noh-jung said on Wednesday was due to market volatility and falling semiconductor stock prices.
Gn bussni
