SK Hynix’s AI Memory Is Sold Out—$BTC Traders Know a Good Supply Squeeze

SK Hynix reported record third-quarter results on Wednesday, posting revenue of 104.6 trillion won (almost $78 billion) and operating profit of 83.3 trillion won ($65.5 billion), according to its earnings release. It was the first time the South Korean memory chip maker’s quarterly sales topped 100 trillion won ($74.5 billion). Revenue rose 328% from a year earlier, while operating profit climbed 632%, producing an 80% operating margin. Analysts surveyed by Bloomberg had expected operating profit of 77.5 trillion won.

Net income reached 39.8 trillion won, up 216% from a year ago but down 58% from the second quarter. CFO Kim Woo-hyun attributed the sequential decline to net non-operating expenses of 32.6 trillion won, comprising charges outside chip sales, led by an 11.6 trillion won currency loss and a 22.9 trillion won valuation loss on investments.

SK Hynix told investors that demand for memory will continue outrunning supply through 2030, with DRAM and HBM volumes through 2029 effectively sold out. DRAM is standard memory used in servers, phones and PCs, while high-bandwidth memory, or HBM, is stacked memory positioned beside AI processors to feed them data. “Given the complexities involved in implementing leading-edge processes and the lead times required to construct new production facilities,” Kim Woo-hyun said, “a situation where supply cannot keep up with demand is expected to persist for some time, a constraint projected to continue through 2030.”

The company said some customers recently adjusted their HBM specifications, which it interprets as evidence that demand is overwhelming available supply. “Demand remains so strong that customers’ volume requirement is more than double that of what we can supply today,” SK Hynix said on the call. It has signed long-term agreements with 14 key customers, including leading global cloud providers, reserving more than 50% of its 2027 and 2028 production capacity. The contracts typically run five years, allow prices to move within an agreed range and include safeguards such as deposits. SK Hynix expects investment to rise significantly in 2027 as the first phase of its Yongin chip complex enters full-scale operation.

Citigroup analyst Peter Lee opened the Q&A by questioning what supports confidence in AI investment when monetization appears slow, a concern Citadel founder Ken Griffin raised eight days earlier by saying investors are “almost certainly” in an AI bubble. CEO Kwak Noh-Jung responded that major cloud customers reported year-over-year cloud revenue growth of 30% to 80% and cloud order backlogs up two-fold to five-fold. Ken Griffin, founder of the Wall Street giant Citadel, said Tuesday that investors are “almost certainly” in an AI bubble, though he said he was not telling them to dump.