South Korea's Kospi jumped 6.6% on Wednesday after SK Hynix reported a record third quarter and said memory shortages will last through 2030. SK Hynix shares rose 11%, Samsung Electronics gained 9% and Micron added 4%.
South Korea's Kospi surged 6.6% on Wednesday as stronger-than-expected earnings from SK Hynix revived investor appetite for artificial intelligence stocks. SK Hynix climbed 11% and Samsung Electronics jumped 9%.
The rally reached U.S. premarket trading, where Micron Technology and SanDisk both gained 4%, according to CoinDesk. It builds on a recovery in AI stocks over the past few days, after weeks of pressure as investors questioned the AI infrastructure buildout.
Record margin and a supply warning
SK Hynix said a shortage of supplies will last through 2030, after a record third quarter. Its operating margin rose to a company-record 80%, ahead of the 78.4% consensus, while revenue came in 7% above Wall Street estimates.
MarketWatch attributes the beat to surging prices and higher sales of higher-end products. The average selling price of DRAM chips rose by a high-20% rate from the second quarter, and NAND prices rose by a mid-20% rate, the company said.
Long-term contracts and shareholder returns
Like its rivals, SK Hynix has been signing long-term agreements to lock in high prices. The company said more than 50% of 2027 and 2028 production is covered by such contracts.
It also plans approximately 100 trillion won in shareholder returns this year, with dividends of at least 30 trillion won and buybacks of at least 60 trillion won.
The open question for SK Hynix and its rivals is whether overproduction returns, as in past cycles. Cantor analyst C.J. Muse argued the current AI cycle is elongated and durable, and that equipment lead times of one to two years will limit added capacity.
Sources: MarketWatch, CoinDesk
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