SK Hynix posts record 83 trillion won profit on AI memory demand

SK Hynix, the South Korean company that makes the high-bandwidth memory used in artificial intelligence chips, reported the most profitable quarter in its history in results released on October 28, 2026, Korea time. Operating profit for July to September reached about 83.3 trillion won, up 632 per cent from a year earlier, on revenue of 104.6 trillion won, the first time quarterly revenue has passed 100 trillion won. That is an operating margin of about 80 per cent. The company said its newest memory, HBM4, entered full-scale mass production during the quarter, and it announced a shareholder return plan worth about 100 trillion won for the 2026 financial year, combining dividends and share buybacks.

Every advanced AI system runs on processors that need fast access to huge amounts of data. High-bandwidth memory, or HBM, stacks memory chips on top of each other and places them next to the processor, so data moves much faster. Makers of AI accelerators depend on it, and SK Hynix has been the leading supplier. When companies around the world spend heavily on AI data centres, a large share of that money flows to a few memory makers.

An 80 per cent operating margin is extraordinary for a manufacturing company and shows how tight supply of AI memory has become. Customers have signed long-term contracts that lock in more than half of SK Hynix's output for 2027 and 2028, which tells investors that big buyers expect demand to stay high for at least two more years. The move to HBM4, the next generation, also raises the bar for rivals trying to catch up.

There is a flip side for everyone else. When memory makers shift production to AI chips, supply of ordinary memory for phones, laptops and servers can tighten, which tends to raise prices. Businesses planning hardware purchases, including Indian IT firms, data centre operators and device makers, may see higher memory costs as a result.

The record shareholder payout also signals a change in how chipmakers use their windfall. Rather than keep all the cash for new factories, SK Hynix is returning a large amount to investors, while still investing in capacity. For India, which is trying to build its own semiconductor industry, the results are a reminder of how valuable advanced memory has become and how far ahead the leading producers are.

Short-term: The results confirm that spending on AI hardware remains strong, supporting chip stocks and suppliers. Memory prices for other devices may stay firm as production favours AI.

Long-term: With HBM4 in mass production and capacity contracted into 2028, SK Hynix is positioned to keep its lead, while rivals race to win AI memory orders. Any slowdown in AI data-centre spending would be the main risk.

Who is affected: Companies building AI data centres and accelerators, PC and phone makers that buy memory, enterprise IT buyers, chip investors, and countries such as India that are developing semiconductor supply chains.

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