SK hynix Q3 Operating Profit Jumps 632% on AI Chip Demand

Quick Answer: SK hynix Q3 operating profit rose 632 per cent on-year to 83.33 trillion won (RM256.6 billion) for the July-September period, driven by AI demand for its memory chips. Net profit of 39.77 trillion won still fell behind the 59.67 trillion won analyst average, and the shares have fallen nearly 60 per cent from their June peak. For shareholders, the company has announced an extra 60 trillion won return plan after completing a 40 trillion-won programme.

How Big Was SK hynix Q3 Operating Profit?

SK hynix Q3 operating profit and AI memory chip demand — Demand for advanced memory chips drove SK hynix’s July-September earnings.

SK hynix said on Wednesday that its third-quarter operating profit soared 632 per cent on-year. The July-September figure of 83.33 trillion won equals RM256.6 billion.

Sales reached 104.61 trillion won in the quarter. The memory chip giant has posted record revenue and operating profit for six straight quarters since the second quarter of last year.

Why Did SK hynix Net Profit Miss Expectations?

Net profit jumped 215.7 per cent from last year to 39.77 trillion won. Even so, the earnings fell behind market expectations.

The average analyst estimate of net profit stood at 59.67 trillion won, according to Yonhap news agency citing its own data firm. That leaves a gap of 19.90 trillion won.

What Is Driving AI Memory Demand at SK hynix?

SK hynix is a specialist supplier of high-bandwidth memory chips to Nvidia. Key products are DRAM chips and NAND storage components, both needed to process the data crunched by generative AI.

AFP’s reporting points to soaring DRAM prices amid a global shortage and stronger sales of high-margin HBM as the main earnings drivers. The AI boom has also lifted prices and shipments of conventional NAND chips.

Is the SK hynix Earnings Peak Still Ahead?

Counterpoint analyst MS Hwang said long-term agreements with major customers, including Nvidia, signal “another phase of price increase across both conventional DRAM, NAND and HBM”.

Hwang said quarterly earnings have not yet reached their peak and the upward trajectory will likely sustain at least through 2027.

What Are the Risks to SK hynix Shares Into 2027?

Hwang named weaker AI spending, increased competition and the company’s own capacity expansion as factors that dictate price volatility. The most severe threat, he said, would be a 2018-style scenario where cloud service providers pull back on orders at the same time.

The shares have been under pressure since June, when investors largely shrugged off record earnings already priced in. Sejong University professor Kim Dae-jong said the stock has fallen nearly 60 per cent from its June peak.

Kim noted that “stock prices tend to anticipate future conditions rather than simply reflect current earnings”. He added that today’s extraordinary earnings may not be sustainable one or two years from now.

How Much Cash Is SK hynix Returning to Shareholders?

SK hynix announced an additional plan to return 60 trillion won to shareholders on Wednesday. This follows the completion of a 40 trillion-won shareholder return programme.

Calls for more dividends or buybacks have grown since the shares retreated from record highs in June over the outlook for US tech firms’ AI spending. Investors new to payouts can read our Dividend Investing Guide.

Does SK hynix Matter for Bursa Malaysia Investors?

SK hynix is not listed on Bursa Malaysia, so it works as a sector signal rather than a local holding. Investors may want to watch how AI memory pricing shapes the wider chip sector.

Readers tracking AI hardware can find more in our AI Stock Analysis for Malaysians guide.

Key Takeaways

Operating profit: 83.33 trillion won (RM256.6 billion) for July-September, up 632 per cent on-year.
Net profit: 39.77 trillion won, up 215.7 per cent, but below the 59.67 trillion won analyst average.
Price pressure: Shares have fallen nearly 60 per cent from their June peak.
Shareholder returns: An additional 60 trillion won plan follows a completed 40 trillion-won programme.
Outlook: Counterpoint’s MS Hwang expects upward price trajectory through 2027, with a 2018-style pullback named as the main risk.

This article is for information only and is not investment advice. Do your own research before making any investment decision.

Frequently Asked Questions

What was SK hynix’s Q3 operating profit?

SK hynix’s operating profit for July-September rose 632 per cent on-year to 83.33 trillion won, or RM256.6 billion. The company said AI demand for its advanced memory chips drove the result.

Is SK hynix listed on Bursa Malaysia?

No, SK hynix is not listed on Bursa Malaysia. Malaysian investors can follow it as a sector signal for AI memory pricing.

Why did SK hynix shares fall after record earnings?

Shares have been under pressure since June, when investors largely shrugged off record earnings already priced in. The stock has fallen nearly 60 per cent from its June peak, according to Sejong University professor Kim Dae-jong.

How much cash is SK hynix returning to shareholders?

SK hynix announced an additional 60 trillion won return plan after completing a 40 trillion-won shareholder return programme. Calls for more dividends or buybacks have grown since the shares fell from their June record highs.

Source: View Original Article — The content is based on the original publisher. Refer to the original content for accurate info. Contact us for any changes.