SK hynix says memory demand will outstrip supply through 2030

SK hynix said today that the structure in which memory demand exceeds supply will persist through 2030, and it announced a quarter to match. Third-quarter revenue hit 104.6155 trillion won, the first time quarterly sales have passed 100 trillion won in the company's history.

Operating profit came in at 83.3338 trillion won, an operating margin of 80%. Net profit was 39.7756 trillion won, a 38% net margin. Eighty percent. On memory chips. Let that glow for a moment.

The numbers behind the shortage

Revenue rose 32% from the second quarter's 79.3187 trillion won and 328% from 24.4489 trillion won a year earlier, according to the company. Operating profit climbed 38% on the quarter and 632% on the year. Converted, revenue works out to about $78.86 billion, and as we reported in our earlier coverage, it cleared LSEG SmartEstimates of 98.34 trillion won in revenue and 76.72 trillion won in operating profit.

Over the first three quarters of 2026, cumulative revenue stands at 236.5105 trillion won and operating profit at 181.4867 trillion won, per Chosun Biz.

One line does not glitter: net profit fell 58% from the second quarter's 93.9226 trillion won, though it is up 216% on the year. The figures in hand do not explain the drop, and that question stays open.

Why 2030

The company's reasoning is physical. In its words, "Given technical difficulty of leading-edge processes and the long lead time required to build new production facilities, it expects the structure in which demand exceeds supply to persist through 2030."

On the conference call, as MoneyToday reported, SK hynix added a twist: "Despite high demand, the realizable demand for next year, taking into account actual supply conditions, is expected to remain at a level similar to that of this year." Translation: the world wants more than the factories can make, so volume is capped by supply, not by appetite.

The company is also locking in buyers. It has signed long-term agreements with 14 major customers, including leading global cloud service providers, covering more than 50% of total production capacity for 2027 and 2028. Contract terms are typically five years, and SK hynix says it is discussing extensions with a number of customers. The agreements carry a mechanism that reflects market conditions within an agreed price range. The release does not name the customers or disclose the ranges.

On the product side, the plan is to ramp the M15X plant in Cheongju to maximum capacity by year-end to raise HBM4 output. SK hynix expects HBM4 to pass HBM3E in both shipment volume and revenue in the fourth quarter. In NAND, it will lift its 321-layer process to more than half of domestic capacity in the same quarter. SK hynix is a key supplier of high-bandwidth memory to Nvidia, which is how a memory maker ends up at the center of the AI buildout.

A mountain of cash, and a very generous plan

At the end of the quarter, cash and equivalents stood at 114.5 trillion won, up 26.5 trillion won. Borrowings fell 2.8 trillion won to 15.8 trillion won, leaving net cash of 98.7 trillion won.

Then the returns. For fiscal 2026, SK hynix will pursue about 100 trillion won in shareholder returns: cash dividends of 30 trillion won or more, plus buybacks and cancellations of 60 trillion won or more, aiming to return 50% or more of free cash flow.

The board approved a third-quarter dividend of 14 trillion won (our earlier story put it at 14.1035 trillion won), or 20,000 won per share. Half of that is a 10,000 won special dividend sharing gains from the Kioxia investment, and the record date is November 30. It also approved a 20 trillion won buyback. Half will be cancelled for shareholders. The other roughly 10 trillion won goes to employee compensation and is not counted in the shareholder return total. The 40 trillion won buyback announced in August was completed last week, with those shares to be cancelled shortly.

Not everything went to plan. SK hynix discontinued its review of a Solidigm IPO, which was meant to raise outside capital for production expansion. It cited "recent financial market conditions and other factors." The release does not say how Solidigm's expansion will be funded instead.

What to watch

• Capex. SK hynix says investment will rise "significantly" next year as Yongin Phase 1 enters full-scale operation. The announcement gives no specific investment budget.
• The net profit gap. An 80% operating margin beside a 58% quarterly drop in net profit invites an explanation.
• Fourth-quarter HBM4. The company has put its crossover over HBM3E on the calendar. Now it has to ship it.
• The 2027 and 2028 contracts. More than half of capacity is spoken for, within price ranges the company has not disclosed in the release.

Over on Reddit's r/LocalLLaMA, one user put the buyer's view bluntly: "Unfortunately, the already insanely inflated prices for RAM may start to look like a steal in the coming years." The company just told investors, in writing, that scarcity runs through 2030. Everything is historic. Especially today.