SK Hynix says memory shortage lasts until 2030, half of output sold

SK Hynix says the global memory-chip shortage will last until 2030, and it has already sold more than half of its 2027 and 2028 production capacity under long-term agreements.

The warning came with record numbers. The world's second-largest memory chip maker reported quarterly revenue of 104.6 trillion Korean won ($78.1 billion), its highest ever and a 32% rise from the previous quarter. Operating profit hit a record 83.3 trillion won ($62.1 billion), up 38% quarter-on-quarter.

The company attributed the performance to strong demand for advanced memory products, including high-bandwidth memory, or HBM, the chips that sit alongside AI accelerators. SK Hynix supplies that memory to Nvidia.

What does the shortage mean for buyers?

The squeeze has cut into the margins of electronics manufacturers. Smartphone, PC and game console makers now find it harder to avoid raising prices, according to the company's assessment of the market.

SK Hynix plans to spend at least 40 trillion won ($30 billion) on capacity this year, up from roughly 30 trillion won ($23 billion) in 2025. That capital sits behind long-term supply deals covering more than 50% of production for 2027 and 2028, per its earnings presentation. Buyers who lack those contracts face a market where supply is spoken for years ahead.

How much is going back to shareholders?

The company said it will return a total of 100 trillion won ($75 billion) to shareholders. That adds to a previously announced 40 trillion won ($29.8 billion) buyback launched earlier this year. Much of the cash comes from one-off investment gains on SK Hynix's stake in Kioxia, Toshiba's former memory chipmaking division.

CEO Kwak Noh-Jun framed the payout as policy, not a one-off gesture. "Our principle has been to share the majority of the gains from successful strategic investments with our shareholders," Kwak said during the earnings presentation. "These gains help replenish our capacity for shareholder returns."

How did markets react?

SK Hynix's Korea-traded shares rose 10.9% on Wednesday after the earnings report. Samsung Electronics gained 9% ahead of its own results, due the following day. The broader KOSPI index rose 6.6%.

The report lifted tech and chip stocks across Asia and sustained a rally that began Tuesday after Anthropic filed its S-1 registration form ahead of a hotly anticipated IPO.

The enthusiasm has limits. SK Hynix shares remain down just over 50% from their mid-year peak. Investors have battered AI-related stocks on fears that AI spending will slow, driven by continued bottlenecks in data center construction and worries about returns.

On Oct. 22, SK Hynix postponed an IPO for Solidigm, its U.S. unit. On Wednesday's earnings call, Kwak blamed market volatility and the slide in semiconductor stocks for the decision.

Why does this matter for South Korea?

The country's exports have surged on the AI boom. Exports between January and September surpassed $800 billion for the first time, already exceeding the total for all of 2025, and they are on track to exceed $1 trillion.

The Bank of Korea on Tuesday estimated exports could drop by as much as $100 billion compared with earlier forecasts if U.S. Big Tech companies curb their infrastructure spending. SK Hynix's sold-out capacity through 2028 offers some insulation, but a sustained AI slowdown would test whether record profits and $75 billion in payouts can survive softer demand.