SK Hynix Says DRAM and HBM Capacity Effectively Sold Out Through 2029, Announces ~100 Trillion Won Shareholder Return Plan
In its Q3 earnings call, SK Hynix stated that DRAM and HBM capacity is effectively sold out through 2029 due to long-term agreements and ongoing negotiations, while unveiling a ~100 trillion won annual shareholder return plan including special dividends.
South Korean semiconductor maker SK Hynix disclosed during its third-quarter earnings conference call on October 28, 2026, that its DRAM and High Bandwidth Memory (HBM) capacity for the next three years, through 2029, is effectively sold out. This assessment combines volumes secured under existing Long-Term Agreements (LTAs) with demand currently being specifically negotiated with customers. The statement directly counters recent market concerns regarding an "AI peak" and potential slowdowns in HBM demand.
Financial results showed Q3 revenue reaching 104.6154 trillion won, up 327.9% year-over-year, and operating profit hitting 83.3338 trillion won, a 632.1% increase, with an operating margin exceeding 80%. This marks the first time the company's quarterly revenue surpassed 100 trillion won. On the demand side, SK Hynix expanded its LTA-signed customer base from 10 to 14, including major global cloud service providers (CSPs). Secured LTA volumes account for over 50% of total production capacity for 2027 and 2028, with non-LTA capacity to be flexibly adjusted based on market needs.
Addressing speculation that a reduction in HBM stacking layers (e.g., from 12 to 8) might signal weakening demand, SK Hynix explained this as a "desperate measure" by customers to build more AI accelerators within limited supply, aiming to increase the number of available chips per capacity unit. The company emphasized that even accounting for such adjustments, current customer requests exceed its supply capability by more than double. Additionally, the next-generation HBM4 is expected to surpass the incumbent HBM3E in both shipment volume and revenue share in the fourth quarter.
Regarding capital allocation, SK Hynix announced a shareholder return plan totaling approximately 100 trillion won for fiscal year 2026. This includes over 30 trillion won in cash dividends and over 60 trillion won in share buybacks and cancellations, fulfilling the commitment to return more than 50% of free cash flow (FCF) to shareholders. The board resolved to pay a Q3 cash dividend of 14 trillion won (20,000 won per share), which includes a special dividend of 10,000 won per share reflecting investment gains from Japanese memory chipmaker Kioxia. A previously announced 40 trillion won share buyback was completed last week and will soon undergo cancellation procedures.