SK Hynix reported a 632% profit jump and says its memory chips are nearly sold out through 2029, which lifted chip stocks and matters for device costs.
SK Hynix, a South Korean maker of memory chips, reported record third-quarter results on Tuesday. Profit rose 632% from a year earlier to over $62 billion. The numbers beat Wall Street estimates, and chip stocks jumped on Wednesday. The company also said that virtually all of its memory production capacity is already spoken for through 2029.
Memory chips store data for computers and the servers that run AI tools. SK Hynix said revenue rose 328% from a year earlier. It beat expectations for both revenue and operating profit, which is what a company earns from its core business. The company also said demand for memory chips would outpace supply for the foreseeable future.
SK Hynix shares rose nearly 11% in Korea. Its US-listed depositary receipts, which are certificates that let American investors trade a foreign company's stock, rose 10%. Rival Samsung gained 9% in Korea. In US markets, the Roundhill Memory ETF rose 4.5%, while Nvidia edged up a little less than 1%.
AI-related chip stocks had been shaky. The iShares Semiconductor ETF was down about 8% over the past month. Investors have worried about tighter debt markets and questions about demand for AI. A week earlier, Korean AI cloud company Elice fell 32% on its first day of trading. It had been seen as the country's hottest IPO of the year, and the drop hurt both SK Hynix and Samsung. Analyst Nic Puckrin said the results gave investors a glimpse of a bright future.
Memory chips go into phones, laptops and the servers behind cloud services. Trade Nation strategist David Morrison noted that SK Hynix, Samsung and US-based Micron account for around 90% of memory chip design and manufacture. So their results are a useful gauge of this part of the AI build-out. For investors, that can move stock prices. For buyers of devices and cloud services, it could bear on hardware costs, though the report does not say how.
Samsung reports its own earnings on Thursday, October 29, and investors will be watching closely. Its numbers will show whether SK Hynix's strength is shared across the industry. It is not yet clear whether the rally will last or how any of this will affect prices for consumer devices.
Memory chip makers say demand is far ahead of supply, so Samsung's report on October 29 is the next check on whether that holds.
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