SK hynix earnings: record 83 trillion won profit sends the Kospi up over 6%

Seoul's chip stocks had a morning to remember. The SK hynix earnings released on Wednesday, with a record 83.33 trillion won of third-quarter operating profit, pushed South Korea's Kospi up more than 6% and set off an automatic trading curb.

What happened

Revenue reached 104.6155 trillion won, the first quarter above 100 trillion won in the company's history, and operating profit was 83.3338 trillion won, an 80% margin, SK hynix said. Net profit came to 39.7756 trillion won. Yonhap reported that operating profit jumped 557.2% from a year earlier, the equivalent of $62.8 billion, while revenue rose 327.9%. It was the sixth straight quarter of record revenue and operating profit.

The balance sheet strengthened too. Cash and equivalents rose by 26.5 trillion won during the quarter to 114.5 trillion won, while borrowings fell to 15.8 trillion won, leaving net cash of 98.7 trillion won. From the second quarter, revenue grew 32% and operating profit 38%, the company said.

Sales of HBM4 and high-value server products expanded, and the company said long-term agreements now cover more than 50% of its 2027 to 2028 production capacity. It plans about 100 trillion won of shareholder returns this year, much of it from gains on its Kioxia stake, after dropping a review of a U.S. listing for its Solidigm unit.

Shortly before 10 a.m. the exchange operator triggered a buy-side "sidecar," pausing program buy orders for five minutes after KOSPI 200 futures rose 5%, Yonhap said. By late morning Samsung Electronics was up 7.77% and SK hynix 7.76%, and AFP later reported the index up more than 6%.

Why it matters

The numbers land in the middle of the AI spending debate. "While Wall Street argues over whether the AI arms race can keep financing itself, SK hynix has just reminded the market that somebody on the other side of all that capex is receiving the cheque," Stephen Innes of SPI Asset Management told AFP. SK hynix itself said supply is not keeping pace with demand.

It also follows a rough stretch. SK hynix shares fell nearly 30% in the three months after its second-quarter report, Yonhap noted, and Korean stocks were hit in the Asian chip selloff earlier this month, around the time Goldman slashed its Kospi target. Wednesday's rally shows how quickly sentiment can turn when earnings deliver.

What's next

Samsung reports on Thursday, AFP said, while Microsoft and Alphabet report on Wednesday and the Federal Reserve decision arrives early Thursday Korean time. SK hynix earnings set a high bar for all of them. The company's figures are in its third-quarter earnings release, and future SK hynix earnings will be judged on HBM4, which the company expects to become its mainstream product from the fourth quarter.