SK hynix will announce its third-quarter results on October 28, 2026. The company plans to publish its earnings release shortly before 9 a.m. Japan time and hold its earnings call at 9 a.m. According to FnGuide market estimates reported by Newsis, operating profit is expected to reach 76.964 trillion won, with an operating margin in the high 70% range. These figures are market forecasts, however, not results or guidance announced by the company. Beyond the headline numbers, this earnings report will draw attention for how far production of the high-bandwidth memory "HBM4" for AI has ramped up, as well as the expansion of long-term supply contracts, capital spending funded by enormous profits, and shareholder return policy.
Operating margin forecast in the high 70s, a further improvement from last quarter
According to FnGuide data published by Newsis on October 23, SK hynix's third-quarter consolidated revenue is forecast at 98.2257 trillion won and operating profit at 76.964 trillion won. Compared with the second-quarter consolidated results the company announced on July 29, that implies revenue growth of 23.8% and operating profit growth of 27.1%. All figures are consolidated results under K-IFRS, cover calendar quarters, and are stated in Korean won.
| Metric | Q2 company-reported result | Q3 market forecast | Change vs. prior quarter |
|---|---|---|---|
| Revenue (trillion won) | 79.3187 | 98.2257 | +23.8% |
| Operating profit (trillion won) | 60.5426 | 76.9640 | +27.1% |
| Operating margin | 76.3% | 78.4% | About +2.0 points |
The forecast third-quarter operating margin is calculated by dividing operating profit of 76.9640 trillion won by revenue of 98.2257 trillion won and multiplying by 100, giving 78.354239...%, which rounds to 78.4%. The same method gives 76.3% for the second quarter, implying a margin improvement of about 2.0 points. The growth rates for revenue and operating profit are calculated as "Q3 forecast ÷ Q2 actual − 1," multiplied by 100 and rounded to one decimal place. Note that SK hynix reported its second-quarter operating margin as a rounded 76%, but unrounded figures were used to calculate the improvement.
The second-quarter figures used for comparison are based on SK hynix's preliminary results and may change following audit and review. The third-quarter figures, meanwhile, are only market estimates, not confirmed results.
Forecasts vary. In Chosun Biz's October 21 report, DS Investment & Securities projected operating profit of 70.1 trillion won, while Meritz Securities projected 80.1 trillion won, a 10 trillion won gap between the two. Because they were compiled at different times, these cannot be treated as a breakdown of the FnGuide consensus, but they share the view that the market expects extremely high profitability. The first thing to watch on October 28 is how well actual profit lives up to those expectations.
HBM4 shipments have begun, but the pace of the ramp-up is unclear
In its July earnings announcement, SK hynix said it began mass-production shipments of HBM4, its next-generation high-bandwidth memory, in the second quarter and would expand production in the second half. It also said it had completed sample shipments of the next-generation HBM4E in the first half. But starting shipments of a mass-production product is a separate matter from whether volumes have grown as planned.
On this point, Chosun Biz reported on October 21, citing its own interviews with industry sources, that HBM4 shipment volumes fell short of initial expectations in the third quarter, following a similar shortfall in the second. It cited partial delays in the schedule of NVIDIA's next-generation AI platform "Rubin" and more time than expected needed to tune the performance of mass-production parts. This is a report based on industry sources, however, not shipment results or reasons for delay officially announced by SK hynix.
It is therefore not possible to conclude from the company's announcement of the start of HBM4 mass-production shipments alone that second-half ramp-up is proceeding as planned. In the October 28 results, what matters is less a reconfirmation of when shipments began than how far shipment volumes have actually grown and what outlook the company has for further production expansion.
At the same time, it would not be appropriate to explain the expected operating margin in the high 70s by HBM4 growth alone. For the second quarter, SK hynix said prices for both DRAM and NAND rose sharply from the prior quarter and that sales of HBM, AI server DRAM, and enterprise SSDs expanded. Profit contribution by product has not been disclosed, so company-wide profitability improvement and the HBM4 ramp-up need to be evaluated separately.
Long-term supply deals with about 10 customers, and capital spending is expanding
As of July, SK hynix had signed long-term supply agreements with about 10 companies, including major strategic partners, and was in talks on additional contracts. The company positions this as an effort to strengthen supply stability and operational stability. Expanding long-term contracts is an important factor for gauging future demand, but not all of the contracts cover HBM4, and details on the covered products have not been disclosed.
Contract terms, supply volumes by product, and whether prices are fixed or capped have also not been disclosed. The same goes for whether customers make prepayments or purchase commitments. For this reason, the signing of long-term contracts alone cannot be taken as evidence that memory prices will keep rising, nor that customer prepayments have secured funding for capacity expansion.
Production expansion is moving ahead not only in HBM but also in NAND flash memory. According to the July announcement, 321-layer NAND has already become the largest product by share of the company's total NAND output, and it was planned to account for about 50% of NAND production capacity in Korea by year-end. That 50% target is based on capacity in Korea, however, and does not refer to global capacity including Solidigm.
SK hynix has also said it will bring forward the planned start of mass production at its M15X fab, and at the Yongin semiconductor cluster it plans to begin operating the first-phase cleanroom in early 2027, then expand capacity in stages. The start of cleanroom operations does not mean capacity will ramp up fully right away. The company also says it will build out the advanced packaging facility "P&T7," the NAND production site "M17," and a new semiconductor cluster in stages, weighing demand trends and investment efficiency. Even if long-term contracts make future demand easier to see, actual supply expansion requires both facilities and continued capital outlays.
Additional Solidigm investment and shareholder returns: how will huge profits be allocated?
In an official explanation on October 23, SK hynix said it was abandoning consideration of a pre-IPO funding round and an initial public offering for its subsidiary Solidigm. It also indicated its view that existing facilities alone cannot adequately meet growing demand and that additional production facilities will be needed in the United States. Having withdrawn one funding option, the company has not eliminated the need for capital spending itself. It says it will continue to consider the timing, scale, and financing method of the investment, and there has been no announcement that a specific plant construction budget has been approved.
SK hynix's financial base is ample. As of the end of June 2026, cash and cash equivalents stood at 88 trillion won and net cash at 69.4 trillion won. These are end-of-June balances, however, and do not indicate surplus funds as of October or any investment budget set aside for Solidigm.
The company subsequently approved a share buyback and full cancellation worth 40 trillion won on August 19. It plans to carry out the repurchase over about three months from August 20 and to cancel all repurchased shares. However, the 40 trillion won cannot be treated as spending that is still unexecuted, nor can investment capacity be calculated by simply subtracting it from the end-of-June cash balance, because the cash balance date and the timing of the buyback differ.
The shareholder return target is also based on a measure different from operating profit. SK hynix aims to raise its total return target for 2025–2027 cumulative free cash flow from the previous "up to 50%" to "more than 50%." This is not a promise to distribute half of operating profit to shareholders; it is a policy of returning funds through a combination of buybacks and cancellations and dividends, based on the free cash flow that remains after business operations and capital spending.
In assessing this earnings report, it is important not to confuse the operating profit the market expects, the cash the company holds, and its future shareholder return target. The key figures are summarized below.
| Metric | Period/date | Status | Meaning | Source |
|---|---|---|---|---|
| Operating profit of 76.964 trillion won | Q3 2026 | Market forecast for consolidated results | Quarterly operating profit | FnGuide data published by Newsis |
| Net cash of 69.4 trillion won | End of June 2026 | Period-end balance reported by the company | Financial position: cash minus interest-bearing debt | SK hynix Q2 results |
| More than 50% of cumulative free cash flow | 2025–2027 | Total return target the company is aiming for | Policy for allocating funds to shareholders | SK hynix's August 19 announcement |
These three metrics differ in both period and meaning. Operating profit reflects accounting profitability, and net cash shows the financial position at a specific point in time. The free cash flow–based return target, by contrast, is a policy for future allocation of funds, not an amount already paid. They therefore cannot simply be added or subtracted to derive current investment capacity.
In its August announcement, SK hynix said it plans to announce the scale and implementation of additional shareholder returns at the time of its third-quarter results, after approval by the board of directors and taking into account cash flow, market conditions, and distributable profit. In the October 28 results, the specific terms of these additional returns, along with the HBM4 ramp-up and capital spending policy including Solidigm, will be the focus. The key question for assessing SK hynix's outlook is not only whether it can meet the market's high expectations of an operating margin in the high 70s, but also how it allocates the profits it generates between the next round of supply expansion and shareholder returns.