SK hynix, the South Korean chipmaker that supplies the memory at the heart of the world's most powerful artificial-intelligence systems, has posted the biggest quarter in its history: operating profit of 83.3 trillion won for the three months to September, up 632 per cent on a year earlier — more than seven times higher — on revenue of 104.6 trillion won. At the exchange rate quoted alongside the results, that profit is worth about $63 billion and the revenue about $79 billion. Analysts had expected operating profit of roughly 77 trillion won, so the result cleared forecasts by a wide margin, it was the first time the company's quarterly revenue has passed 100 trillion won, and it was its sixth record quarter in a row.
The engine is a specialised memory called HBM — high-bandwidth memory. Where ordinary memory sits elsewhere inside a computer, HBM stacks memory chips vertically, one on top of another, and places them right beside an AI processor, so the enormous volumes of data an AI model works with can move back and forth at extreme speed. SK hynix is the world's leading maker of it, and its newest generation, HBM4, entered full-scale mass production in the quarter and began shipping in earnest; the company expects HBM4 shipments and revenue to overtake the previous generation, HBM3E, in the fourth quarter. The rest of the business surged with it: sales of server DDR5, the memory that fills data-centre racks, jumped more than 40 per cent from the previous quarter, average DRAM prices rose by a high-20s percentage in three months, and prices for NAND flash memory rose by a mid-20s percentage.
Scarcity on that scale turns into margin. SK hynix kept 79.7 per cent of every won of sales as operating profit — an operating margin of about 80 per cent, a company record and, among the world's big technology firms, second only to the 80.7 per cent posted by American rival Micron. Its operating profit ranked third among global technology giants, behind only Samsung Electronics and Nvidia. The one soft line was net profit, which came in at 39.8 trillion won after a stronger won produced an 11.6 trillion won foreign-exchange loss and the value of the company's investment holdings fell by 22.9 trillion won on paper.
It was what the company said about the future, though, that stunned even seasoned watchers of the chip industry. Add together the volumes already locked in under long-term supply agreements and the demand now under detailed negotiation with customers, SK hynix said, and its DRAM and HBM output is "essentially sold out over the next three years, through 2029". The company has signed long-term agreements with 14 major customers, including the global cloud giants that run the world's biggest data centres, and those deals alone already cover more than half of its planned production capacity for both 2027 and 2028. The agreements typically run for five years and include deposits so that customers' purchase plans turn into actual orders — and the company is discussing extending some of them further still.
For its flagship AI memory, the queue is longer than the factory. "The customer demand we see is more than double our available supply," the head of the company's HBM sales and marketing said on the earnings call. Finance chief Kim Woo-hyun said the company expects "an environment in which supply falls short of demand to persist through 2030", with demand for DRAM still growing at a mid-20 per cent pace next year. Chief executive Kwak Noh-jung said the six straight record quarters mattered less than what sits beneath them: "Through long-term agreements, growth potential unlike anything in the past is showing up as a concrete shift in our business structure, and we will turn that change into sustainable competitiveness."
Supply cannot be wished into existence. The company is pushing its M15X plant to maximum capacity by the end of the year to make more HBM4, and investment will rise significantly in 2027, centred on its new Yongin fab cluster — but new cleanrooms will open in stages, and management warned that more spending does not automatically mean proportionally more chips, because HBM consumes far more factory capacity for every unit of memory it holds. Part of the answer is being built in the United States: in West Lafayette, Indiana, SK hynix broke ground in August on an advanced-packaging plant worth more than $4 billion, backed by up to $458 million in federal CHIPS Act grants. Wafers made in South Korea will be shipped there to be stacked and tested into finished HBM for American customers, with the cleanroom due to open in October 2028, production of next-generation HBM planned for the second half of 2029 and about 1,000 jobs at the site. It is the company's first American production base, planted in the middle of the customer base — Nvidia and the U.S. cloud giants — that is buying every chip it can make.
With cash piling up — net cash reached 98.7 trillion won — the company also unveiled the biggest payout in its history: about 100 trillion won, roughly $75 billion, to be returned to shareholders this year through more than 30 trillion won of cash dividends and more than 60 trillion won of share buybacks and cancellations, including a 40 trillion won buyback announced in August and already completed. The third-quarter dividend alone is 20,000 won per share, half of it the company's first-ever special dividend, funded by gains on its stake in Japanese chipmaker Kioxia. Investors who had watched the stock slide for weeks on fears that AI spending had peaked responded at once: the shares surged more than 10 per cent in Seoul.
None of this stays inside the chip industry. Memory goes into every phone, laptop and car, and because each HBM stack ties up far more factory capacity than the same amount of ordinary memory, the AI land-grab is tightening supply — and lifting prices — across the whole memory market, as this quarter's near-30 per cent jump in DRAM prices shows. That is one way the AI build-out quietly reaches household budgets: in pricier devices, and in the cost of the data centres behind every AI service. SK hynix's rivals are racing the same wave — at least one analyst estimate put Samsung's HBM revenue for the quarter above SK hynix's, and America's Micron is expanding on the same demand — which is why a sold-out order book in South Korea has become one of the clearest measures of how hard the world is still pushing to build AI.
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