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SK Hynix shares surged over 8% after the company reported a third-quarter operating profit of 83.33 trillion won ($78.86 billion), beating analyst estimates, and announced a $25 billion shareholder return plan. Revenue jumped 327.9% year-over-year, while shares outperformed the Kospi index.
SK Hynix’s third-quarter operating profit of 83.33 trillion won ($78.86 billion) far exceeded estimates of 76.72 trillion won, driven by a 632.1% year-over-year surge in operating profit. Revenue reached 104.62 trillion won ($78.86 billion), a 327.9% increase from the prior year. The company plans to return 100 trillion won to shareholders through dividends and buybacks, with a 14 trillion won dividend approved for the quarter, funded by gains from its Kioxia investment. Shares rose 8.2%, outperforming the Kospi’s 6.25% gain.
The profit beat and shareholder return plan highlight SK Hynix’s financial strength and strategic focus on investor rewards. Server DDR5 memory chip shipments rose over 40% from the previous quarter, while long-term agreements with 14 major customers cover more than 50% of its 2027-2028 production capacity. The company also aims to raise shareholder return targets to over 50% of cumulative free cash flow from 2025-2027, aligning with AI-driven demand for high-bandwidth memory (HBM4).
However, SK Hynix’s decision to pause IPO plans for Solidigm may limit funding for its U.S. subsidiary, while the structural supply-demand imbalance in the memory market could persist, affecting pricing power. The company will cancel half of its 20 trillion won share buyback this year after completing a 40 trillion won buyback last week.
SK Hynix plans to increase shareholder return targets to more than 50% of cumulative free cash flow from 2025-2027. The company expects HBM4 shipments and revenue to surpass HBM3E in the fourth quarter. It will also cancel half of its 20 trillion won share buyback this year.
SK Hynix’s profit beat and $25 billion shareholder return plan underscore its financial resilience and investor focus. The key uncertainty remains whether the structural memory market imbalance will persist, impacting long-term profitability.
Topics: Semiconductor, Shareholder Return, Memory Chip Market, HBM4 Demand, AI Investment, Semiconductor Revenue, Dividend Increase, Share Buyback
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Source: CNBC
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