Kospi jumps 6.6% past 6,000 as SK Hynix record profit revives AI rally

What happened

SK Hynix, one of the world's biggest makers of memory chips, said third-quarter revenue reached 104.6 trillion won, the first time it has topped 100 trillion won in a quarter. Operating profit came to 83.3 trillion won, an 80% margin. Both beat LSEG SmartEstimates, CNBC reported. The company also set out roughly 100 trillion won in shareholder returns for 2026. Seoul's market reacted fast. The Kospi gained 374.1 points to finish at 6,012.44, Yonhap reported via Korea JoongAng Daily. The exchange briefly paused program buy orders for a second straight session because futures rose so sharply.

What it means

The numbers are striking even by the standards of the AI boom. According to CNBC, revenue was up 327.9% from a year earlier and operating profit was up 632.1%. Compared with the second quarter, the company said sales grew 32% and operating profit 38%. SK Hynix credited rising prices for key memory products, a sharp increase in sales of server DDR5 chips and the start of large-scale HBM4 shipments. HBM, or high-bandwidth memory, sits next to AI processors and feeds them huge amounts of data quickly.

Investors had worried that the memory cycle might be near its top, and chip shares had been correcting. A Yuanta Securities analyst said the results eased those concerns. SK Hynix said demand for memory should keep running ahead of supply through 2030, because building new factories takes years and leading-edge processes are hard to master. It has signed long-term agreements with 14 large customers, including major cloud providers, covering more than half of its planned output for 2027 and 2028.

The cash return plan also mattered. For 2026, the company is targeting at least 30 trillion won in dividends and at least 60 trillion won in buybacks and share cancellations. That includes a 40 trillion won repurchase finished last week. Its board approved a 14 trillion won third-quarter dividend, part of it a special payout funded by gains on its stake in Japanese chipmaker Kioxia, plus a fresh 20 trillion won buyback. At the end of September, net cash stood at 98.7 trillion won.

The rally was broad among large chip names. Samsung Electronics rose 9.01% and SK Square, the parent of SK Hynix, gained 11.23%. Foreign investors and institutions were net buyers, while individual investors sold a net 1.8 trillion won, Yonhap data showed. Traders in Seoul were also waiting for the US Federal Reserve's rate decision, which fell in the early hours of Thursday local time.

The bull case

SK Hynix showed that AI demand is turning into real profit and cash, not just hype. Long-term contracts covering more than half of capacity for 2027 and 2028 give rare visibility for a usually cyclical industry. With nearly 100 trillion won in net cash and a large buyback and dividend program, the company has room to keep rewarding shareholders while it expands. A tight memory market could also support Samsung and the wider Kospi.

The bear case

A 6.6% jump in one day for a major index shows how much of Korea's market now rides on two chipmakers. If AI spending slows, or new factories bring more supply than expected, memory prices could turn. SK Hynix also dropped plans to explore an IPO for its US unit Solidigm, citing market volatility and a correction in chip shares. Susquehanna's Mehdi Hosseini kept a neutral rating, telling CNBC he preferred Micron and Samsung.