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SK Hynix revenues surged 327.9% y/y to a record 104.62T won in Q3'26.
AI-memory demand and HBM4 expansion could support SK Hynix's growth into 2027.
DRAM, EWY and FLKR offer ETF exposure to SK Hynix's AI-driven growth.
SK Hynix (SKHY - Free Report) reported record third-quarter 2026 results on Oct. 28, 2026, driven mainly by strong artificial intelligence (AI)-related memory demand and growing sales of high-value-added memory chips.
Revenues crossed 100 trillion won for the first time, while operating profit created a quarterly record. The company also outlined plans to expand production capacity, strengthen its high-bandwidth memory (HBM) portfolio and return approximately 100 trillion won to shareholders in 2026.
Overview of Q3’26 Earnings of SK Hynix
The company reported record third-quarter 2026 revenues of 104.62 trillion won, soaring 327.9% year over year and 31.9% sequentially. Operating profit surged 632% year over year to 83.33 trillion won, while net income skyrocketed 215.7% to 39.78 trillion won.
The company’s profitability improved sharply, with an operating margin of nearly 80%, up from 47% in third-quarter 2025 and 76% in second-quarter 2026. The net profit margin was approximately 38%, although net income declined 58% sequentially from 93.92 trillion won, partly reflecting the previous quarter’s unusually high non-operating gains.
SK Hynix’s reported revenues of $73.86 billion beat the Zacks Consensus Estimate of $66.4 billion by 11.2%, but earnings of $3.84 per share missed the consensus estimate for earnings of $5.96 by 35.6%.
Cash and cash equivalents rose by 26.5 trillion won sequentially to 114.5 trillion won. Borrowings fell to 15.8 trillion won, taking net cash to 98.7 trillion won, indicating that the company’s financial position has also strengthened considerably.
Memory Supply Shortage to Persist Through 2030
SK Hynix expects AI-driven demand to continue outpacing memory supply, supported by expanding data-center investment and emerging AI applications. The company aims to boost production capacity and product competitiveness to build on its current growth trajectory, and achieve higher revenue and profitability next year. However, supply growth remains constrained by the technical complexity of advanced manufacturing processes and the lengthy lead times required to build production facilities.
This outlook is favorable for the company because persistent supply constraints could support memory pricing, premium-product sales and profitability. However, the company's performance will continue to depend on AI infrastructure spending, customer demand and the industry's ability to manage capacity expansion.
Advancing Tech to Strengthen Productivity
The company will increase production using its advanced 10nm-class 6th generation (1c) process technology, expand DDR5 and LPDDR5 SOCAMM supplies for AI servers, and ramp up HBM4 production at its M15X facility, targeting maximum capacity by the end of 2026. It expects HBM4 to surpass HBM3E in both shipments and revenue in fourth-quarter 2026.
Meanwhile, the company aims to increase the share of its 321-layer NAND technology to more than half of domestic NAND production capacity in the fourth quarter 2026, supporting growth in high-capacity enterprise SSDs.
To strengthen demand visibility, SK Hynix has signed long-term agreements with 14 major customers, including global cloud service providers, covering more than 50% of its production capacity for 2027 and 2028.
The company expects investment to rise significantly in 2027 as its Yongin Phase 1 facility ramps up and infrastructure expansion continues. However, it will adjust investment plans based on customer demand, product competitiveness, profitability and capital efficiency.
SK Hynix-Heavy ETFs in Focus
SKHY-heavy ETFs could benefit from the company’s record profit growth, driven by surging demand for AI memory chips and higher chip prices.
Roundhill Memory ETF (DRAM - Free Report) provides exposure to HBM, Dynamic random-access memory, NAND flash memory and NOR flash memory technologies behind modern computing and AI-focused evolution. SKHYholds a massive weightage of 22.91%.
DRAM has assets under management worth $19.2 billion and an expense ratio of 0.65%. The fund trades at a three-month average volume of 42.4 million shares.
iShares MSCI South Korea ETF (EWY - Free Report) is one of the main U.S.-listed ETFs for gaining broad exposure to South Korean equities with a major memory-chip component.
SK Hynix holds a 24.89% weightage. EWY has assets under management worth $23.15 billion and an expense ratio of 0.59%. The fund trades at a three-month average volume of 16.7 million shares.
Franklin FTSE South Korea ETF (FLKR - Free Report) provides U.S. investors with exposure to large- and mid-cap South Korean companies, including major semiconductor, financial and automotive businesses. Its returns can also be affected by the Korean won's movements against the U.S. dollar, global trade conditions and swings in AI-related investment.
SK Hynix holds a 19.64% weightage. EWY has assets under management worth $1.78 billion and an expense ratio of 0.09%. The fund trades at a three-month average volume of 813,000 shares.
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ETFs in Focus as SK Hynix Reports Q3 Earnings
Key Takeaways
SK Hynix (SKHY - Free Report) reported record third-quarter 2026 results on Oct. 28, 2026, driven mainly by strong artificial intelligence (AI)-related memory demand and growing sales of high-value-added memory chips.
Revenues crossed 100 trillion won for the first time, while operating profit created a quarterly record. The company also outlined plans to expand production capacity, strengthen its high-bandwidth memory (HBM) portfolio and return approximately 100 trillion won to shareholders in 2026.
Overview of Q3’26 Earnings of SK Hynix
The company reported record third-quarter 2026 revenues of 104.62 trillion won, soaring 327.9% year over year and 31.9% sequentially. Operating profit surged 632% year over year to 83.33 trillion won, while net income skyrocketed 215.7% to 39.78 trillion won.
The company’s profitability improved sharply, with an operating margin of nearly 80%, up from 47% in third-quarter 2025 and 76% in second-quarter 2026. The net profit margin was approximately 38%, although net income declined 58% sequentially from 93.92 trillion won, partly reflecting the previous quarter’s unusually high non-operating gains.
SK Hynix’s reported revenues of $73.86 billion beat the Zacks Consensus Estimate of $66.4 billion by 11.2%, but earnings of $3.84 per share missed the consensus estimate for earnings of $5.96 by 35.6%.
Cash and cash equivalents rose by 26.5 trillion won sequentially to 114.5 trillion won. Borrowings fell to 15.8 trillion won, taking net cash to 98.7 trillion won, indicating that the company’s financial position has also strengthened considerably.
Memory Supply Shortage to Persist Through 2030
SK Hynix expects AI-driven demand to continue outpacing memory supply, supported by expanding data-center investment and emerging AI applications. The company aims to boost production capacity and product competitiveness to build on its current growth trajectory, and achieve higher revenue and profitability next year. However, supply growth remains constrained by the technical complexity of advanced manufacturing processes and the lengthy lead times required to build production facilities.
This outlook is favorable for the company because persistent supply constraints could support memory pricing, premium-product sales and profitability. However, the company's performance will continue to depend on AI infrastructure spending, customer demand and the industry's ability to manage capacity expansion.
Advancing Tech to Strengthen Productivity
The company will increase production using its advanced 10nm-class 6th generation (1c) process technology, expand DDR5 and LPDDR5 SOCAMM supplies for AI servers, and ramp up HBM4 production at its M15X facility, targeting maximum capacity by the end of 2026. It expects HBM4 to surpass HBM3E in both shipments and revenue in fourth-quarter 2026.
Meanwhile, the company aims to increase the share of its 321-layer NAND technology to more than half of domestic NAND production capacity in the fourth quarter 2026, supporting growth in high-capacity enterprise SSDs.
To strengthen demand visibility, SK Hynix has signed long-term agreements with 14 major customers, including global cloud service providers, covering more than 50% of its production capacity for 2027 and 2028.
The company expects investment to rise significantly in 2027 as its Yongin Phase 1 facility ramps up and infrastructure expansion continues. However, it will adjust investment plans based on customer demand, product competitiveness, profitability and capital efficiency.
SK Hynix-Heavy ETFs in Focus
SKHY-heavy ETFs could benefit from the company’s record profit growth, driven by surging demand for AI memory chips and higher chip prices.
Roundhill Memory ETF (DRAM - Free Report) provides exposure to HBM, Dynamic random-access memory, NAND flash memory and NOR flash memory technologies behind modern computing and AI-focused evolution. SKHYholds a massive weightage of 22.91%.
DRAM has assets under management worth $19.2 billion and an expense ratio of 0.65%. The fund trades at a three-month average volume of 42.4 million shares.
iShares MSCI South Korea ETF (EWY - Free Report) is one of the main U.S.-listed ETFs for gaining broad exposure to South Korean equities with a major memory-chip component.
SK Hynix holds a 24.89% weightage. EWY has assets under management worth $23.15 billion and an expense ratio of 0.59%. The fund trades at a three-month average volume of 16.7 million shares.
Franklin FTSE South Korea ETF (FLKR - Free Report) provides U.S. investors with exposure to large- and mid-cap South Korean companies, including major semiconductor, financial and automotive businesses. Its returns can also be affected by the Korean won's movements against the U.S. dollar, global trade conditions and swings in AI-related investment.
SK Hynix holds a 19.64% weightage. EWY has assets under management worth $1.78 billion and an expense ratio of 0.09%. The fund trades at a three-month average volume of 813,000 shares.