SK hynix has warned that the global memory chip shortage could continue until 2030 as growing demand for artificial intelligence puts pressure on supplies.
The South Korean memory manufacturer issued the warning alongside its financial results for the third quarter of 2026, which showed record revenue and operating profit.
The company reported revenue of approximately $78.4 billion, crossing a major quarterly sales milestone for the first time.
Operating profit reached around $62.4 billion, while net profit stood at approximately $29.8 billion. This gave SK hynix an operating profit margin of 80% and a net profit margin of 38%.
AI Demand Drives Record Earnings
SK hynix said strong demand for AI memory helped increase its revenue and profits.
Sales of its high-bandwidth memory chips, particularly HBM4, continued to grow as AI companies expanded their computing infrastructure.
HBM is a type of high-speed memory used in powerful processors that run AI models.
The company expects HBM4 to overtake the older HBM3E standard in both sales revenue and shipment volume during the fourth quarter.
Demand for server DDR5 memory and LPDDR5 SOCAMM memory modules has also increased.
According to Counterpoint Research’s September report, SK hynix held 25% of the global DRAM market by revenue, behind Samsung’s 38% share and slightly ahead of Micron’s 24%.
These companies also supply memory chips used in smartphones and other electronics, including Apple devices.
Memory Shortage Could Last Until 2030
Despite its strong financial performance, SK hynix warned that memory manufacturers are struggling to keep up with demand.
The company expects demand to exceed supply through 2030, mainly because of continued investment in AI systems.
In the coming years, businesses and consumers are expected to drive much of the demand for AI-related memory.
Over the longer term, self-driving vehicles, robotics, and other AI-powered technologies could increase demand further.
SK hynix said building new factories and developing advanced manufacturing processes takes considerable time, making it difficult to increase production quickly.
SK Hynix Plans to Increase Production
To address the shortage, SK hynix plans to expand its manufacturing capacity.
Its new M15X production facility is expected to reach full capacity by the end of 2026, supporting the production of advanced HBM4 memory.
The facility is expected to produce approximately 55,000 to 60,000 wafers per month using the company’s 1b DRAM manufacturing process.
SK hynix is also increasing production of its newer 1c DRAM technology, which is used in products such as LPDDR6.
Meanwhile, the company has reported higher sales of its 321-layer NAND flash memory used in enterprise solid-state drives.
It expects this technology to account for more than half of its domestic NAND production capacity by the end of the year.
The company is also developing High Bandwidth Flash (HBF), a new type of storage designed for AI servers.
HBF could allow AI systems to access large amounts of data without keeping everything in expensive high-speed RAM.
Company Reports Strong Cash Position
SK hynix also reported improvements in its financial position.
At the end of the third quarter, the company held approximately $85.8 billion in cash and cash equivalents, an increase of around $19.9 billion from the previous quarter.
Its borrowings fell by approximately $2.1 billion to $11.8 billion.
As a result, the company’s net cash position increased to approximately $73.9 billion.
The company has also secured long-term supply agreements with 14 major customers, covering more than half of its expected production capacity for 2027 and 2028.
SK Hynix Cancels Solidigm IPO Plans
SK hynix has also decided to cancel its plans for an initial public offering (IPO) of Solidigm, its flash memory subsidiary.
CEO Kwak Noh-Jung said the proposed listing was intended to raise money for expanding Solidigm’s production facilities while reducing the financial burden on SK hynix.
However, the company reconsidered the plan after reviewing market conditions and concluded that proceeding with the IPO would not deliver the expected benefits.
SK hynix also plans to return approximately $74.9 billion to shareholders during 2026 through dividends and share repurchases, including gains from its investment in Japanese memory manufacturer Kioxia.
The company’s latest results show how strongly AI demand is benefiting memory manufacturers. However, its warning suggests that the global shortage of advanced memory chips may continue for several more years.
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