SK hynix Turned Record Profits Into a $25.6B Payday — and the Same Shares Cost 44% More in New York Than in Seoul

SK hynix reported third-quarter operating profit of KRW 83.33 trillion on revenue of KRW 104.62 trillion — the first quarter above KRW 100 trillion — an 80% margin and a 632% year-on-year rise, against consensus of roughly KRW 77.5 trillion. Net profit of KRW 39.78 trillion was also a record, up 215.7% year on year, but 58% below the second quarter, whose KRW 93.92 trillion was flattered by KRW 63.3 trillion of gains on investment assets. The operating line is what funds the payout: operating profit now sets the dividend base, and the third-quarter release did not itemize the non-operating loss that left net profit below half of operating profit.

The board resolved on Oct 28 to declare a KRW 14 trillion cash dividend and to buy back KRW 20 trillion of stock — about $25.6 billion at the roughly KRW 1,328 per dollar rate implied by the same day's coverage. That sits inside an FY2026 return target of roughly KRW 100 trillion: at least KRW 30 trillion of cash dividends, at least KRW 60 trillion of buybacks and cancellations including the KRW 40 trillion the board approved on Aug 19, and a policy of returning more than 50% of cumulative 2025-2027 free cash flow. The target exceeds the KRW 91.2 trillion of free cash flow the company produced over the last twelve months, but the balance sheet holds KRW 69 trillion of net cash, so the return is funded from cash generation rather than borrowing.

Ten ADRs represent one common share, so the American line is a tenth of a Seoul share quoted in dollars. SK hynix sold 177.9 million of them at $149 on Jul 9, 2026, raising about $26.5 billion in an offering more than seven times oversubscribed, and the ADRs jumped 14% on their Nasdaq debut the next day. Two sessions later the Seoul line fell 15.4%, its biggest one-day decline on record, while the ADR premium over Seoul stood at 25.6%; it reached 51% the following day. By Oct 6 the premium was still 38% as the ADR lockup expired, and it has not closed since.

Micron is the cleanest read on what the memory trade now is: fiscal fourth-quarter revenue of $54.23 billion at an 86.8% gross margin, $10.77 billion of capex in the quarter and $27.37 billion across fiscal 2026, with fiscal Q1 2027 guided to $61.5 billion at roughly an 86.25% gross margin. Micron has contracted the vast majority of its calendar 2027 HBM bit supply at significant year-on-year price increases and carries 26 supply agreements worth more than 35% of revenue through 2030, $32 billion of customer financial commitments and roughly $150 billion of remaining performance obligations. That is the supply floor: 2027 prices do not break because the industry is not adding much supply in 2027. The cash-return gap is the stark part — $0.6 billion of dividends and $1.0 billion of buybacks over the trailing twelve months against the roughly $75.3 billion FY2026 target at SK hynix.

The chain runs one way. SK hynix's 80% operating margin becomes free cash flow, becomes KRW 54.3 trillion of fab investment, becomes EUV tools and thermal-compression bonders, becomes HBM4 bits, and then becomes accelerator revenue at the customer. Every step is capacity-constrained rather than demand-constrained, which is why pricing has held. The live risk sits at the top of the stack: industry reporting in late October said SK hynix is shipping more downgraded HBM4 for the second quarter of 2027's Rubin Ultra platform as heat and yield issues complicate 12-layer stacks, and that Nvidia has opened talks with both SK hynix and Samsung Electronics over 8-layer HBM4.

Samsung Electronics is the control experiment. On Aug 21, 2026 its board approved the largest shareholder return in Korean corporate history — roughly KRW 90 trillion to KRW 110 trillion for 2026, about five times the previous record — and on Aug 24 the shares fell more than 8% in early trade. SK hynix's payout was reported in the press on Oct 25 and Oct 26 before the numbers landed, and the Seoul line closed Oct 28 up 5.18% at KRW 1,341,000 as the KOSPI opened 3.26% higher at a two-week high of 5,822.07. Expectations, not arithmetic, separated a 5.18% gain from an 8% fall on two record payout plans.