SK Hynix shares surge 11% as record profit lifts Asian chip stocks

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SK Hynix shares surge 11%

Highlights

SK Hynix shares jumped 11.41% in Seoul.
Samsung shares rose over 9% in the rally.
Traders weigh AI demand against risks.

SK Hynix shares climbed 11.41% to 1,494,000 won, outperforming the Kospi index, which gained 6.84%. The rally followed stronger-than-expected quarterly earnings, substantial shareholder payout plans, and an upbeat outlook for AI memory demand, CNBC reports.

Record earnings and shareholder returns

SK Hynix reported a sevenfold increase in operating profit from a year earlier, with quarterly revenue reaching 104.62 trillion won and operating profit climbing to 83.33 trillion won. The gains reflected strong demand for high-bandwidth memory and higher prices for conventional memory chips, while the company expects demand to exceed supply through 2030.

The chipmaker outlined shareholder returns totaling approximately 100 trillion won, including at least 30 trillion won in cash dividends and 60 trillion won in share repurchases and cancellations. It also approved a special dividend supported by gains from its investment in Japanese memory producer Kioxia.

SK Hynix has secured agreements with 14 major customers covering more than half its production capacity for 2027 and 2028. It expects next-generation HBM4 memory to overtake HBM3E in quarterly shipments and revenue as production expands at its Cheongju facility.

Semiconductor stocks rally across Asia

SK Hynix's results triggered gains across Asian semiconductor stocks, suggesting investors see its earnings as evidence of sustained demand throughout the memory industry. Samsung Electronics shares advanced more than 9%, while Japan's Kioxia and China's Semiconductor Manufacturing International also benefited from improved sector sentiment.

The rally reflected expectations that memory shortages and higher chip prices could support profitability beyond the current earnings cycle. Companies supplying AI data centers have benefited from growing demand for advanced memory alongside processors used to train and operate AI models.

The results also strengthened sentiment ahead of Samsung's quarterly earnings announcement, as investors assessed whether other major chipmakers would report similarly strong pricing and demand conditions.

Traders weigh further gains against AI spending risks

The earnings surprise and shareholder payouts gave investors two reasons to reassess SK Hynix shares: stronger near-term profitability and a larger share of earnings being returned to shareholders. Long-term customer contracts also provided reassurance about future demand.

Market expectations remain divided, however. Susquehanna analyst Mehdi Hosseini maintained a neutral rating on SK Hynix, favoring Micron and Samsung for their more diversified businesses. He also considered SK Hynix undervalued and preferred its U.S.-traded depositary receipts over the Korean listing.

Further gains will depend on whether memory prices remain elevated and AI infrastructure investment continues at its current pace. Although supply shortages support the earnings outlook, heavy spending on new capacity and uncertainty over returns from AI projects remain important risks for investors.

Earlier, we reported that SK Hynix is exploring first U.S. memory chip production with Intel.

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