SK hynix earns ₩83trn and books half its 2027-28 output

WIRE · SEMICONDUCTORS · KOREA · Data as at 28 Oct 2026

SK hynix made ₩83.3 trillion of operating profit in the third quarter, on revenue of ₩104.6 trillion. That is an 80% margin, and revenue passed ₩100 trillion in a quarter for the first time. On the same morning the memory maker told investors two things that pull in opposite directions. It will hand about ₩100 trillion back to shareholders this year. And it has already sold more than half of the memory it can make in 2027 and 2028, under long-term deals with 14 customers. On the Semiconductors layer, that is the shape of a shortage: the cash is being paid out now, while the factories that would ease it are booked, not built.

What happened

Why cash cares

The payout is large next to everything else SK hynix reported. At 30 September it held ₩114.5 trillion of cash against ₩15.8 trillion of borrowings, so net cash was ₩98.7 trillion. Cash rose by ₩26.5 trillion in the quarter while borrowings fell by ₩2.8 trillion. The company says the ₩100 trillion plan meets its pledge to return at least half of free cash flow.

Here is our own arithmetic, not a company figure. Operating profit came in about 9% above the ₩76.3 trillion that brokers expected. The ₩100 trillion of returns is roughly equal to the whole net cash pile at the end of September, and about 1.2 times the quarter's operating profit. At about 1,320 won to the dollar, the rate on 28 October, it is around $76 billion.

The money moves in three pieces. The ₩40 trillion buyback announced in August finished last week, and those shares will be cancelled. Today's board added a ₩14 trillion dividend and a ₩20 trillion buyback. Only half of that buyback, ₩10 trillion, counts as a shareholder return and will be cancelled. The other ₩10 trillion of shares goes to employee pay. So about ₩64 trillion of the ₩100 trillion is now done or approved, and about ₩36 trillion is still to be decided this year, less any earlier 2026 dividends the release does not list.

Half of the ₩20,000 dividend is a special payment of ₩10,000 a share from gains on SK hynix's stake in Kioxia, the Japanese flash memory maker. On the roughly 700 million shares the ₩14 trillion implies, that special part is about ₩7 trillion.

Figure: Paying out while the output is booked. SK hynix's third-quarter revenue, operating profit, net cash and the pieces of its ₩100 trillion return plan, with the share of 2027 and 2028 capacity already under long-term deals. The 9%, 1.2 times, ₩64 trillion, ₩36 trillion and ₩7 trillion figures are our arithmetic on the company's 28 October release.

The step that is still open

Capacity. SK hynix says demand will run ahead of supply through 2030 because leading-edge memory is hard to make and new fabs take years to build. The plan to close that gap is mostly next year's. M15X, its newest fab in Cheongju, is meant to reach full capacity by the end of 2026 to make more HBM4, the high-bandwidth memory stacked beside AI chips. The first phase of the Yongin cluster enters full-scale operation in 2027, and the company says investment will rise significantly. It gave no figure, and said it will adjust the size and timing to demand.

That is why the long-term deals matter. More than half of 2027 and 2028 output is spoken for by 14 customers before the new lines are running. The rest is what every other buyer will compete for.

The second-order read

Who gets paid. Shareholders, through ₩24 trillion of dividends and cancelled shares approved today, with up to about ₩36 trillion more to come this year. Employees, through ₩10 trillion of repurchased shares. And SK hynix, which keeps an 80% margin with prices that move inside an agreed band rather than a fixed price.

Who pays. The 14 customers with long-term deals, including the big cloud providers, who have locked in more than half of two years of output at prices that still follow the market inside the band.

Who waits. Every buyer without a long-term deal, competing for less than half of 2027 and 2028 capacity. And the equipment makers, until SK hynix puts a number on next year's investment.

Stuck step. New wafer capacity at Yongin and M15X, which the company says cannot catch demand before 2030.

Three cautions

These are preliminary figures. The release says the audit review is not finished and the numbers may change.

Net profit was ₩39.8 trillion, well below operating profit and 58% lower than the second quarter's ₩93.9 trillion. The release does not explain the gap, so do not read the operating profit as cash earned.

The long-term deals are not fixed-price. Prices move with the market inside a range, so a softer market would still cut into revenue, just less sharply.

What to watch

• 29 October: Samsung Electronics' full third-quarter results and its memory division's profit, the other half of the Korean memory story.
• Fourth quarter: whether HBM4 really passes HBM3E in shipments and revenue, as SK hynix expects.
• Early 2027: the investment figure for the Yongin cluster and any US plans, after the Solidigm listing was dropped.
• Next long-term deals: whether more customers sign, or extend past five years.

Read: what does SK hynix do, HBM vs DDR5, SK hynix drops a $15B Solidigm IPO but keeps the US NAND fab plan and Micron locks over 75% of 2027 memory output

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Not investment advice. Do your own research. The 9% beat, the 1.2 times ratio, the $76 billion conversion, the ₩64 trillion done or approved, the ₩36 trillion still to decide, the roughly 700 million shares and the ₩7 trillion special dividend are our arithmetic.

References

1. SK hynix, "SK hynix Announces 3Q26 Financial Results", 28 Oct 2026. Revenue, profit, cash, long-term agreements, capacity plans and shareholder returns.
2. Yonhap News, "SK hynix to report third-quarter results tomorrow" (Korean), 26 Oct 2026. Broker consensus for operating profit.
3. YTN, "Samsung and SK hynix third-quarter results" (Korean), 28 Oct 2026. Won at about 1,320 to the dollar.