SK hynix Stock Slides 23% Despite a Record 79.7% Operating Margin

SK hynix (KOSPI: 000660), the Korean memory chipmaker that supplies high-bandwidth memory for AI processors, reported a record operating margin of 79.7% for Q3 2026 on Oct. 28. It also said its DRAM and high-bandwidth memory (HBM) output was effectively sold out through 2029.

The shares went the other way. SK hynix closed at ₩1,132,000 ($834) on Nov. 6, 2026, down 23% from ₩1,472,000 on Nov. 2, as a report on US export licenses for its China plant and a sell-off in AI-related stocks after the US midterm elections hit the stock.

Dollar figures in this article are converted at ₩1,356.6 per dollar, the Seoul rate at the 3:30 p.m. close on Nov. 6, 2026, as reported by the Korea Herald. Here is what the company makes, what its numbers show and why the stock fell.

Q3 revenue passed ₩100 trillion for the first time, according to the preliminary results SK hynix filed on DART, Korea's electronic disclosure system.

Operating profit rose 632.1% from a year earlier and beat the ₩75.97 trillion ($56.0 billion) average forecast compiled by FnGuide, the Seoul Economic Daily reported. Net profit, however, fell 57.7% from Q2 2026.

The company tied the growth to rising sales of HBM4, its newest HBM generation, and of DDR5 memory for servers, and it expects HBM4 to overtake the older HBM3E in shipments and revenue in Q4 2026, the Korea Herald reported.

"Customers are requesting more than twice the volume we can supply," said Kim Ki-tae, head of HBM sales and marketing at SK hynix, on the Oct. 28 earnings call, according to the Korea Herald. "Our medium- to long-term HBM demand outlook remains unchanged," he said.

Signed long-term agreements cover more than 50% of production capacity for 2027 and 2028, and the company forecast memory shortages through 2030. "The current share price does not fully reflect our earnings and cash flow," said Chief Financial Officer Kim Woo-hyun, the Korea Herald reported.

What SK hynix Makes

SK hynix makes two kinds of memory: DRAM, which holds data only while powered, and NAND flash, which keeps it without power. All of its ₩131.9 trillion ($97.2 billion) in first-half 2026 sales came from semiconductors, according to its half-year report.

HBM is DRAM stacked in layers and mounted beside an AI processor so that data moves faster. SK hynix makes DRAM and NAND at four production sites, run from its headquarters in Icheon, south of Seoul.

The company began in October 1949 as Kukdo Construction, became Hyundai Electronics in 1983 and Hynix Semiconductor in 2001, and took its current name in March 2012. It had 57 consolidated subsidiaries on June 30, 2026, the report shows.

Its NAND business includes Solidigm, a US subsidiary that makes solid-state drives for data centers and runs a plant in Dalian, China, the Korea Times reported. All three Korean credit raters grade SK hynix AA+, and Moody's rates it A3.

Foreign investors can also buy SK hynix in New York. Its American depositary receipts (ADRs) began trading on the Nasdaq on July 10, 2026, after an offering of 177.9 million ADRs at $149 each, and each ADR represents one-tenth of a Seoul-listed common share, the Korea Times reported. The ticker is SKHY, according to the prospectus filed with the SEC.

At ₩1,132,000, the 730.5 million shares in issue before the planned cancellation were worth about ₩827 trillion ($610 billion) on Nov. 6, 2026.

Why Net Profit Halved

The gap between operating and net profit comes from items outside the core business. Pre-tax profit in Q3 2026 was ₩32.6 trillion ($24.1 billion) below operating profit, while in Q2 2026 it was ₩62.2 trillion ($45.8 billion) above it, the DART filings show.

The preliminary filing does not break those items down. One known item is SK hynix's stake in Kioxia, the Japanese NAND maker: the company said it would hand most of the Kioxia gains it realized in 2026 to shareholders, the Korea Herald reported.

The full breakdown will appear in the Q3 quarterly report. Korea's Capital Markets Act gives listed companies 45 days after each quarter ends to file it, which points to mid-November 2026; our guide to reading DART and KIND filings shows where to find it.

Earnings Per Share

SK hynix earned ₩58,955 ($43.46) per share in 2025, up 117% from ₩27,182 in 2024, according to FnGuide data on Naver Finance. Earnings per share (EPS) is net profit attributable to shareholders divided by the share count, and it is the line where the Q3 drop below operating profit shows up.

EPS jumped to ₩56,066 in the first quarter of 2026 and ₩131,640 in the second, or ₩187,706 ($138.37) for the half, 3.2 times all of 2025. On the Q3 net profit of ₩39.78 trillion and the share count implied by the Q2 figures, third-quarter EPS works out to about ₩55,800 ($41), by our calculation. That is 58% below Q2, even though operating profit rose.

At ₩1,132,000, the shares traded at 19.2 times 2025 EPS and 3.2 times the FnGuide consensus of ₩355,258 ($261.87) for 2026. That estimate assumed Q3 net profit of ₩61.28 trillion, so the non-operating loss is likely to pull it lower.

Dalian, Solidigm and the Nov. 4 Swing

On Nov. 4, 2026, SK hynix rose 4.72% to ₩1,464,000 by 9:07 a.m. in Seoul after AMD forecast Q4 revenue of $17 billion, above the $16.2 billion analysts expected, Hankyung reported. It closed down 0.14% at ₩1,396,000, after the KOSPI fell nearly 7% from its intraday high and then recovered, the Seoul Economic Daily reported.

Early that day, a Reuters report carried by the Korea Times said US officials had held up approval for American chipmaking tools that SK hynix needs to expand production at Dalian. The company argues that more output there would help fund Solidigm's planned US plants.

Solidigm plans to invest about $45 billion in two NAND plants in Marcy, New York, with investment potentially reaching about $100 billion, two people told Reuters. Solidigm executives have met US Commerce Department officials nearly 10 times since late August 2026, the report said.

"Ultimately, none of this is going to go forward without a green light from the White House," said Leland Miller, a member of the US-China Economic and Security Review Commission, according to the Reuters report.

SK hynix argues that it would only install equipment in an existing empty cleanroom rather than build a new facility, the Korea Times reported. On Oct. 29, 2026, it told DART that Solidigm is reviewing ways to expand capacity but that "nothing has been finalized so far," and it promised an update by Nov. 27, 2026 (translated from Korean).

Selling then spread across AI-related stocks. After Democrats won control of both chambers of the US Congress, investors worried about tighter rules on AI data centers, and SK hynix fell 9.46% on Nov. 5 and 10.44% on Nov. 6, the Korea Times and Korea Herald reported.

The stock touched ₩1,089,000 during the Nov. 6 session, roughly one-third of its 2026 peak of ₩2,987,000 ($2,202), the Korea Herald said. Foreign investors sold a net ₩5.4 trillion ($4.0 billion) of SK hynix from Nov. 2 to Nov. 6, more than any other stock, and their stake fell to 48.27%, the lowest since November 2021, the Seoul Economic Daily reported.

Korea context: SK hynix sits inside SK Group, one of Korea's chaebol, the family-led business groups. Its largest shareholder is SK Square, a group holding company, with 20.50%, and the National Pension Service holds 8.06%, according to the half-year report. SK hynix and Samsung Electronics together make up roughly half of the KOSPI's market value, the Korea Times reported, so their swings move the whole index.

Buybacks, Dividends and Analyst Targets

The payout plan is large. SK hynix plans about ₩100 trillion ($73.7 billion) of returns for 2026, including at least ₩30 trillion in dividends and at least ₩60 trillion in buybacks and cancellations, the Korea Herald reported.

"Our principle has been to share most of the gains with shareholders when our strategic investments bear fruit," said CEO Kwak Noh-jung on the call, according to the Korea Herald.

Under a plan approved on Aug. 19, 2026, the company finished buying 23,693,272 shares for ₩40.0 trillion ($29.5 billion) on Oct. 23 and scheduled their cancellation for Nov. 5, 2026, its DART filing shows. That retires 3.24% of the 730,492,365 shares in issue.

On Oct. 28, the board approved another ₩20.0 trillion ($14.7 billion) of buybacks through Jan. 28, 2027. Under the filing, about half supports shareholder value and about half funds stock-based pay for employees.

The board also declared a Q3 dividend of ₩20,000 ($14.74) per share, ₩14.1 trillion ($10.4 billion) in total, with a record date of Nov. 30, 2026. Half of it is a special payout tied to Kioxia gains, the Korea Herald reported.

Seven Korean brokerages cited by Hankyung on Oct. 29, 2026 set targets from ₩1,650,000 to ₩4,000,000, an average of about ₩3,380,000 ($2,491). SK Securities and Kyobo Securities sat at the top with ₩4,000,000 ($2,949), and SK Securities expects Q4 operating profit of ₩105 trillion ($77.4 billion).

KB Securities cut its target to ₩3,500,000 from ₩4,200,000, IBK Securities to ₩3,200,000 from ₩4,000,000, while Yuanta Securities raised its target to ₩3,700,000 from ₩3,300,000 and Hana Securities kept ₩3,600,000. IBK said its cut reflected "the gap with the current share price, not concerns about conditions in the memory market," Hankyung reported (translated from Korean).

BNK Securities was the outlier at ₩1,650,000 ($1,216) with a hold rating. "The slowing of memory demand momentum after its peak in the second quarter is expected to continue," the firm said, according to Hankyung (translated from Korean).

Taken together, SK hynix's core numbers are the strongest in its history, while its share price is now reacting to US decisions on Dalian, AI data centers and its customers' spending. The next dated markers are Solidigm's update to DART by Nov. 27, 2026, the dividend record date on Nov. 30, 2026 and the end of the ₩20 trillion buyback window on Jan. 28, 2027.