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MUWednesday, 28 Oct 2026

SK Hynix Q3 results confirm the upturn is accelerating, HBM4 capacity held by a duopoly, Taoyuan labour talks drag on to 6 Nov

SK Hynix's Q3 operating margin rose to 80% quarter on quarter. That confirms that the mid-October worry that 'slowing price rises mean the cycle has peaked' does not show up in the Q3 numbers. Hynix has locked up more than 50% of its 2027-2028 capacity under long-term contracts, faster than Micron (35%, targeting 50% by 2030).

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That gives Micron more upside from spot-price premiums but slightly less visibility. The Samsung and Hynix duopoly keeps taking up HBM4 capacity, so Micron's HBM share stays capped by capacity until 2027, and its earnings upside depends more on conventional DRAM and NAND.

Key evidence

  • SK Hynix Q3 2026 (company press release, 28 Oct): revenue KRW 104.6 trillion (up 32% QoQ, up 328% YoY), operating profit KRW 83.3 trillion and operating margin 80% (76% in Q2 and about 72% in Q1, three straight quarters of expansion). Net profit of KRW 39.8 trillion was down 58% QoQ because Q2 included a one-off gain on the Kioxia investment, not because the business deteriorated.
  • Drivers: full-scale HBM4 shipments and a big jump in server DDR5. In NAND, the driver is 321-layer TLC enterprise SSDs. The company's view: as advanced process nodes get harder and new fabs take a long time to build, demand will exceed supply until 2030.
  • Long-term contracts compared: Hynix has signed long-term supply agreements with 14 major customers (including large global cloud providers), locking in more than 50% of total 2027 and 2028 capacity. Some customers are negotiating terms longer than the usual 5 years. Pricing floats with the market within an agreed range (with a floor and a cap), a structure similar to Micron's contracts.
  • Micron (management closed-door meeting, 27 Oct): 26 strategic customer agreements, with long-term contracts at about 35% of sales and a target of 50% by 2030.
  • HBM4 capacity: Hynix says it will bring its Cheongju M15X fab to full capacity for HBM4 by the end of the year, and that Q4 HBM4 shipments and revenue will both exceed HBM3E. Its first Yongin fab starts formal production next year, and capital expenditure will 'increase significantly compared with this year'. Net cash at the end of Q3 was KRW 98.7 trillion.
  • Samsung: Korean brokers estimate that Samsung's Q4 HBM share could approach 40%, and its 2027 output, mainly HBM4, is already fully contracted. Figures published earlier: Micron's monthly HBM capacity is about a third of the Korean makers', and its revenue share is estimated to have fallen to about 17%.
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  • Labour dispute in Taiwan: the second round of talks, chaired by Taoyuan City Government on 27 Oct, ended without a result. A third round is provisionally set for 6 Nov, and the possibility of a strike has not gone away (Liberty Times, NOWnews). Micron's response: it has twice published its pay offer, and the union's demands concern multinational company policy, which 'must go through formal procedures'. About 2,258 members in Taoyuan are eligible to strike, a small fraction of Micron's 15,000 employees in Taiwan. Taichung has already signed an agreement.
  • DIGITIMES: Micron plans to recruit engineers in South Korea in November (single source, details not public).

Catalysts to watch

  • Tomorrow (29 Oct), Samsung Electronics' Q3 earnings call: watch HBM4 shipments and 2027 contract pricing
  • Third round of labour talks in Taoyuan on 6 Nov
  • Hynix's first Yongin fab starting production next year, and the scale of the big rise in capital expenditure
  • Whether Samsung's Q4 HBM share really approaches 40%
  • Whether Micron's HBM share can break through its capacity constraint before 2027

Risks

  • Hynix is locking up capacity faster, so Micron's incremental upside in 2027-2028 relies more on spot premiums, with lower visibility than Hynix.
  • Capacity pressure from the Samsung and Hynix HBM4 duopoly makes it hard for Micron's HBM share to break through 17% in the short term.
  • The Taoyuan labour dispute has dragged on to 6 Nov. The risk of near-term disruption is fairly low, but the dispute will keep developing.
  • Micron's limited HBM upside means its earnings upside has to come from the conventional DRAM/NAND price-rise cycle, which is more sensitive to macro demand.
Sources (5)
  • SK Hynix Q3 2026 official press release (28 Oct)
  • Micron management closed-door meeting, 27 Oct
  • Liberty Times
  • NOWnews
  • DIGITIMES

A brief is a lead for our research, not a verified conclusion or advice.