Every AI server needs somewhere to hold the data its processors are chewing through, and SK hynix, the South Korean chipmaker, makes the high-bandwidth memory that sits beside Nvidia's chips. On Wednesday it reported the best quarter in its history.
Revenue for July to September passed 100 trillion won for the first time, and operating profit came to 83.3 trillion won, more than seven times what it made a year earlier. That is about 80 won of operating profit on every 100 won of sales.
Why memory got so expensive
Prices of its main products rose on the back of demand for AI memory. CNBC reports that average selling prices for DRAM, the standard memory chip, climbed by a high-20s percentage from the previous quarter, helped by a bigger share of sales from HBM4, its newest high-bandwidth chips.
SK hynix thinks this runs for years. It describes a cycle in which AI makes companies more productive in areas like software development and customer service, which drives more AI use, which drives more spending on the infrastructure behind it. Because leading-edge chips are hard to make and new factories take a long time to build, it expects demand to exceed supply through 2030. Fourteen big customers, including leading cloud providers, have signed long-term contracts covering more than half of its capacity for 2027 and 2028.
Beat or miss, depending on the line
Whether this counts as a beat depends on which line you read. Against the analyst forecasts CNBC cites from LSEG, revenue and operating profit both came in ahead. Net profit, the bottom line after everything else, was 39.8 trillion won, down 58% on the previous quarter and well short of the 59.67 trillion won average estimate AFP cites from Yonhap.
Investors went with the bigger number. The shares closed 10.89% higher on Wednesday, against a 6.63% rise for the Kospi index. SK hynix is also handing back about 100 trillion won for 2026, more than half of it by buying back and cancelling its own shares.
The risk is the cycle turning. Analyst Hwang told AFP that weaker AI spending, more competition and SK hynix's own expansion could all make prices volatile in 2027, and that the worst case would be a repeat of 2018, when cloud companies pulled back their orders at the same time. Kim Dae-jong, a business professor at Sejong University, told AFP the stock had fallen nearly 60% from its June peak, and said that was the main reason the company needs to focus on winning back shareholders.
