By Kwanwoo Jun
SK Hynix, the main supplier of high-bandwidth-memory products to Nvidia, delivered record quarterly earnings as robust artificial-intelligence investments by big global tech companies continued to fuel demand for its advanced AI chips.
The South Korean memory-chip maker attributed the stellar third-quarter performance to brisk shipments of higher-end HBM3E products and higher prices for DRAM chips, including high-capacity double data rate 5 products, used in data servers for AI training and mobile devices. Analysts have said they expect the AI boom, which requires high-performance chips, to continue well into next year.
Surging demand for enterprise solid-state drives also helped improve earnings at the company's NAND chip business.
SK Hynix executives said on a postearnings call that its HBM and other memory-chip products are almost sold out for 2026 due to surging AI-driven demand. "The company's HBM supply will remain tight in 2027," said Ki Tae Kim, head of the HBM sales and marketing department.
The company was ahead of rival HBM manufacturers in supplying 12-layer HBM3E products, which currently dominate the premium segment of the AI-chip market, and is poised to repeat that feat with the next-generation memory product.
SK Hynix said Wednesday that it completed discussions with key customers about next year's HBM supply. It said HBM4 shipments would start in the fourth quarter of 2025, with a full-scale sales expansion due in 2026.
Net profit more than doubled from a year earlier to a record 12.598 trillion won, equivalent to $8.80 billion, for the three months ended September, SK Hynix said. That topped a previous high set in the first quarter of this year and beat market views. Analysts had expected a bottom line of 8.491 trillion won, according to a FactSet consensus estimate.
It also posted record revenue and operating profit for the quarter. The top line climbed 39% to 24.449 trillion won. Operating profit exceeded 10 trillion won for the first time, jumping 62% to 11.383 trillion won.
Shares in SK Hynix rose as much as 6.0% in morning trading after the results. The stock has more than tripled this year, driven by investor enthusiasm about AI.
The rally in tech stocks has raised concerns about an AI bubble forming, however, as companies pour billions of dollars into advancing AI infrastructure. Some analysts say the AI-fueled chip boom could persist for the next few years, which should continue to buoy earnings at SK Hynix.
HSBC analysts Ricky Seo and Hankil Chang said growing use of AI applications will prompt cloud computing service providers to increase investments in data centers, driving both DRAM and NAND chip prices higher over the next one to two years. In a research note ahead of the earnings release, they said SK Hynix's operating profit could reach 15 trillion won in the final quarter and hit 67 trillion won for 2026.
Nomura analysts led by C.W. Chung gave a similarly upbeat outlook, saying recently that "an unprecedented supercycle" in the memory-chip market is approaching, with big U.S. tech companies' substantial AI-fueled investments likely to continue into 2027 and 2028.
Research director M.S. Hwang of Counterpoint Research earlier this week said the HBM market is likely to grow sharply, reaching $43 billion by 2027, providing strong earnings leverage for memory manufacturers like SK Hynix. He sees DRAM and NAND chip prices rising 15%-20% in the fourth quarter, suggesting strong earnings guidance from the company.
Write to Kwanwoo Jun at kwanwoo.jun@wsj.com
(END) Dow Jones Newswires
October 28, 2025 22:40 ET (02:40 GMT)
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