South Korean memory specialist SK Hynix reported a sharp rise in quarterly profit as demand for advanced DRAM and high-bandwidth memory continues to outpace available production.
The company announced third-quarter revenue of €70.2 billion, up 328 per cent from the same period last year. Operating profit climbed 632 per cent to €55.9 billion, giving SK Hynix an extraordinary operating margin of 80 per cent.
These results mark a remarkable reversal for an industry that has historically endured regular cycles of oversupply, collapsing prices, and costly inventory write-downs.
SK Hynix attributed the performance to rising memory prices and growing sales of high-value products designed for cloud servers and AI accelerators. Server DDR5 memory contributed significantly to the improvement, while shipments of the company’s latest HBM4 products began increasing during the quarter.
HBM4 is expected to become a mainstream part of the company’s high-bandwidth memory business from the fourth quarter, supporting the next generation of AI hardware.
The company’s strong position in HBM has allowed it to benefit from increasingly complicated accelerator designs that require enormous memory bandwidth. However, conventional server memory remains an important part of the story, with DDR5 demand increasing as cloud operators expand their computing capacity.
SK Hynix expects memory shortages to continue for several years and has indicated that substantial parts of its production capacity are already committed to customers through 2029. The company has secured long-term agreements covering more than half of its planned production for 2027 and 2028, giving it greater confidence in future revenue.
Those agreements protect against some of the industry’s traditional pricing volatility, although they could become less attractive if customers eventually reduce hardware spending. The company’s finances have improved dramatically, with cash and cash equivalents reaching €76.9 billion at the end of September.
Borrowings declined to €10.6 billion, leaving SK Hynix with net cash of approximately €66.3 billion and considerable financial flexibility for future investment.
The results have encouraged investors across the semiconductor sector, including those holding rival memory producer Micron. For PC manufacturers and ordinary buyers hoping for cheaper RAM, the prospect of production remaining heavily committed for several years is considerably less encouraging.
