SK Hynix third-quarter profit sharply beats estimates on AI memory boost

South Korean chipmaker SK Hynix on Wednesday posted a record high quarterly profit, sharply beating estimates, and announced over $25 billion in dividends and buybacks, sending shares more than 8% higher.

Here are SK Hynix's third-quarter results compared with LSEG SmartEstimates, which are weighted toward forecasts from analysts who are more consistently accurate:

Revenue rose 327.9% from a year earlier, while operating profit climbed 632.1% year on year.

Compared with the previous quarter, revenue climbed 31.9%, while operating profit surged 37.6%.

SK Hynix shares rose more than 8%, outperforming the Kospi's 6.25% gain.

The company posted record quarterly revenue and operating profit, with sales exceeding 100 trillion won for the first time, as it announced plans to return about 100 trillion won to shareholders — including at least 30 trillion won in cash dividends and 60 trillion won in share buybacks and cancellations.

In the earnings call, SK Hynix CEO Kwak Noh-Jung cited financial market volatility and a correction in semiconductor stocks as the main reasons to halt its review of potential pre-IPO fundraising and IPO options for its U.S. subsidiary Solidigm.

The company had said it would continue to assess investment timing, scale and financing options to support Solidigm's growth and enhance shareholder value.

Kwak also outlined plans to return gains from its investment in Japanese chipmaker Kioxia to shareholders, saying that, "We intend to return the gains realized from our investment in Kioxia this year to our shareholders through a special dividend."

The chipmaker approved a third-quarter dividend of 14 trillion won, including a special dividend funded by gains from its investment in Kioxia.

SK Hynix will also buyback 20 trillion won in shares, half of which will be cancelled this year, after completing its previously announced 40 trillion won shares buyback last week — which will be cancelled shortly — as mentioned in the earnings call.

The company also plans to raise its shareholder return target to more than 50% of cumulative free cash flow generated between 2025 and 2027, as it expects AI investment momentum to continue due to greater adoption of AI services and a more diverse investor base.

The company added that it expects the structural supply-demand imbalance in the memory market, where demand outpaces supply, to continue for the time being.

SK Hynix expects HBM4 to surpass HBM3E in both shipments and revenue in the fourth quarter, as it ramps up production at its M15X facility in Cheongju, South Korea.