SK Hynix Posts Record Third Quarter Earnings, Stock Price Soars
On Wednesday, SK Hynix saw a temporary increase of about 8% in pre-market trading in the United States. Prior to this, the South Korean chip manufacturer announced record quarterly results and predicted that the shortage of memory chips would continue for an extended period. Operating profit increased by 632% year-on-year to 83.33 trillion Korean won, exceeding analysts' expectations; revenue also surpassed 100 trillion Korean won for the first time. The company also announced a shareholder return plan worth approximately 75 billion US dollars, which further boosted the stock price.
SK Hynix' third-quarter performance: Revenue exceeded 104 trillion Korean won
SK Hynix announced that its revenue for the third quarter was 104.62 trillion Korean won, a year-on-year increase of 328% and a 32% increase from the previous quarter. Operating profit reached 83.33 trillion Korean won, up 632% year-on-year and 38% quarter-on-quarter. The operating profit margin rose to approximately 80%.
Both of these figures exceeded analysts' expectations. Revenue surpassed the market estimate of around 98.3 trillion Korean won, and operating profit also exceeded the forecast of 76.7 trillion Korean won. The strengthening of prices and the growth in sales of high-value-added storage products contributed to the improvement in performance.
AI Data centers require more and more memory to support advanced computing loads. SK Hynix benefits from the demand for HBM used in conjunction with AI accelerators, as well as the demand for server DRAM and enterprise-level solid-state drives.
The company expects that HBM4 will surpass HBM3E in both shipment volume and revenue during the fourth quarter. This transition may bring new sources of growth, however, as the industry expands production, investors still need to assess whether high profit margins can be sustained.
SK Hynix expects the storage shortage to continue until 2030
The supply outlook is at the core of a company's profit forecasts. SK Hynix expects that by 2030, demand for storage will continue to exceed supply, due to the complexity of advanced chip manufacturing processes and the time required to build new production facilities.
The company has signed long-term agreements with 14 major customers, covering more than 50% of their total production capacity for 2027 and 2028. The company also stated that by 2029, the majority of its HBM and DRAM outputs have actually been fully booked. These commitments enhance the visibility of future demand and support production planning.
SK Hynix Announces a 100 Trillion Korean Won Shareholder Return Plan
SK Hynix plans to implement a shareholder return of approximately 100 trillion Korean won in 2026, which includes at least 30 trillion Korean won in cash dividends, as well as stock repurchases and cancellations worth over 60 trillion Korean won. The total amount includes the previously announced 40 trillion Korean won repurchase plan; the company stated that this plan was completed in October.
The board of directors also approved a dividend of 20,000 Korean won per share for the third quarter, as well as an additional share repurchase plan of 20 trillion Korean won. Of this additional amount, 10 trillion Korean won will be used for share cancellation, and the remainder will be allocated for employee compensation.
SK Hynix Stock Price Analysis: Key Support and Resistance Levels
SK Hynix' stock price is attempting to rebound, after previously falling from the $195 to $200 range to a recent low of nearly $140. The closing price on the previous trading day was $145.36, and the pre-market quote was around $155.46. Technically speaking, the stock remains under pressure after breaking below several moving averages. The recent rebound indicates that there is interest in buying near the support zone between $140 and $145, but this recovery still needs further confirmation.
On the upside, $150 is the first level that needs to be regained, with subsequent resistance levels around $155 to $161. If the price continues to break above $161, the rebound momentum could strengthen. However, if it encounters resistance in this range, the stock price may face selling pressure again. On the downside, if it falls below $140, it could test the $135 area, with further support levels near $130.
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