SK hynix reported record-breaking earnings for the third quarter on Wednesday, driven by booming demand for high-performance memory chips powering artificial intelligence servers and data centers.

The strong results underscored the company’s growing dominance in the global semiconductor market as the AI race continues to accelerate.

Consolidated operating profit soared 61.9 percent on-year to 11.38 trillion won ($7.94 billion), marking the first time in the company’s history that quarterly profit exceeded 10 trillion won.

Sales jumped 39.1 percent to 24.45 trillion won, while net income surged 119 percent to 12.6 trillion won, resulting in a record net profit margin of 52 percent.

The results surpassed SK hynix’s previous record set in the second quarter, when it logged 22.23 trillion won in revenue and 9.21 trillion won in operating profit. The latest earnings were also in line with market expectations, with local data provider FnGuide forecasting 11.41 trillion won in operating profit and 24.63 trillion won in sales.

The stellar performance was fueled by a combination of higher DRAM and NAND flash prices and surging shipments of high-bandwidth memory chips, a critical component in AI computing systems. Industry watchers said the company’s early lead in AI memory solutions, such as HBM3E and the upcoming HBM4, has positioned it at the center of the AI-driven semiconductor boom.

The record profit significantly improved the firm’s financial structure. Cash and equivalents increased by 10.9 trillion won from the previous quarter to 27.9 trillion won, while total borrowings stood at 24.1 trillion won. This placed SK hynix in a net cash position of 3.8 trillion won, signaling a marked improvement in balance sheet strength for a capital-intensive industry typically characterized by high debt ratios.

Investor sentiment responded swiftly to the upbeat results. The benchmark Kospi opened at 4,061.54, up 1.27 percent from the previous close, briefly touching an all-time intraday high of 4,084.09 before ended trading at 4,081.15. The Kosdaq also rose early in the day before paring gains to close at 901.59. Analysts said SK hynix’s earnings reinforced market optimism about Korea’s semiconductor recovery, alongside gains in US tech stocks overnight.

During its earnings call, SK hynix also announced plans to roll out its sixth-generation high-bandwidth memory (HBM4) in the fourth quarter, aiming to extend its leadership in high-performance memory solutions. The company said it has secured full-order visibility for all DRAM products, including HBM, through 2026, reflecting sustained demand from global technology firms building AI infrastructure.

“We are fully committed to addressing the surging demand driven by AI,” the company said. “As AI applications diversify across industries, we anticipate broad-based expansion of AI infrastructure and continued growth in memory demand.”

SK hynix said it expects DRAM and NAND shipments to rise by a mid to high single-digit percentage in the fourth quarter compared with the previous period. It also confirmed that expanded production at its M15X fabrication facility in Cheongju, North Gyeongsang Province, will lead to higher capital expenditures next year.

The new M15X site, completed ahead of schedule, is expected to serve as a major production base for HBM products starting in 2026. Meanwhile, construction of its Yongin fab in Gyeonggi Province remains flexible, with timelines to be adjusted based on market conditions and the pace of M15X’s ramp-up.

Despite global economic headwinds, SK hynix struck a cautiously optimistic tone for the coming year, saying it remains focused on balancing investment efficiency with its goal of sustaining leadership in AI memory technologies.

By Jie Ye-eun (yeeun@heraldcorp.com)