• SK hynix (000660.KS) shares rose 2.4% after OpenAI CEO Sam Altman met SK Group (034730.KS) executives to discuss HBM supply and Stargate AI infrastructure.
  • SK hynix says customers are requesting more than twice its available HBM supply, underscoring tight AI memory markets.
  • The company's Q3 results showed record revenue and operating profit, with a special dividend tied to Kioxia (285A.T) gains.

Altman's South Korea Visit Reinforces Partnerships

SK hynix shares gained 2.4% following reports that OpenAI CEO Sam Altman met with SK Group Chairman Chey Tae-won and executives from SK hynix and SK Telecom (017670.KS) in Seoul. The discussions, held over lunch on October 31, centered on high-bandwidth memory (HBM) supply and potential data center projects under the Stargate initiative, according to people familiar with the matter. While no new supply contract was publicly announced, the talks underscored the deepening ties between OpenAI and South Korea's chipmakers as AI infrastructure demand strains available memory supplies.

Altman also met separately with Samsung (005930.KS) executives on the same day, highlighting OpenAI's push to secure advanced memory components critical for AI accelerators. SK hynix's head of HBM sales and marketing, Kim Ki-tae, said customers are requesting "more than twice the volume we can supply," reinforcing the scarcity argument driving the stock move. The visit did not produce a publicly disclosed investment commitment, but it reinforced existing partnerships forged under the Stargate umbrella.

HBM Demand Outstrips Supply

The supply-demand imbalance has given memory suppliers significant bargaining power. SK hynix reports long-term agreements with 14 major customers covering more than 50% of its production capacity for 2027-2028. The company's broader statement that DRAM and HBM are "effectively sold out" through 2029 includes both signed agreements and demand still under negotiation, meaning not every projected unit is contractually committed. Still, the trend favors chipmakers.

"What institutional investors like us are really focused on is regulatory stability," said Andrea Valeri, Blackstone (BX)'s country chairman for Italy, at a conference in Milan, though his comments referred to a different market. In the memory sector, the focus is on capacity expansion and technological leadership. SK hynix began full-scale HBM4 production and shipments in the third quarter and expects HBM4 to overtake HBM3E in both shipment volume and revenue within its HBM portfolio in the fourth quarter. The company is accelerating the ramp-up of its M15X facility to support that transition.

Samsung is pursuing the same opportunity and says its 2027 HBM supply is sold out. This is an industry-wide capacity race, not an exclusive OpenAI-SK hynix arrangement.

Financial Performance and Returns

SK hynix's latest quarterly results illustrate the earnings power of the current upcycle. Preliminary third-quarter 2026 figures show revenue of KRW 104.62 trillion, up 328% year over year, and operating profit of KRW 83.33 trillion, up 632% year over year. The operating margin reached 80%, compared with 47% a year earlier. Net profit was KRW 39.78 trillion, up 216% year over year but down 58% sequentially. The company ended the quarter with net cash of KRW 98.7 trillion.

Management attributed the operating gains to higher memory prices and a richer product mix, including server DDR5, HBM4, and enterprise SSDs. The earnings-call transcript also cited a stronger Korean won as an unfavorable currency factor, partly offsetting those gains. The board approved a KRW 14 trillion third-quarter cash dividend, or KRW 20,000 per share, including a KRW 10,000 per share special dividend linked to realized Kioxia investment gains. It also approved KRW 20 trillion in share repurchases, with half earmarked for cancellation and the other half for employee compensation.

Analyst Views and Outlook

Nomura (8604.T) remains bullish on SK hynix, reiterating a Buy rating in October and arguing that memory shortages could persist through at least 2028, according to secondary reporting. Rosenblatt also maintained its Buy rating, dismissing concerns about Chinese competition as excessive. The original research notes were not available, so those views warrant caution compared with company disclosures.

Near term, the key operational milestone is the HBM4 ramp. SK hynix targets maximum M15X capacity by year-end and expects HBM4 to become its leading HBM product in the fourth quarter. The principal commercial milestone is whether OpenAI-related discussions yield disclosed contracts, financing, and construction schedules. Longer term, management expects memory demand to exceed supply through 2030, citing manufacturing complexity and long facility-development lead times.

The upside scenario is sustained AI investment, successful HBM4 execution, and long-term agreements that preserve profitability as capacity expands. The downside scenario is that higher infrastructure costs, financing constraints, or disappointing AI returns slow customer spending while suppliers are investing heavily. For now, the evidence supports strong demand and supplier leverage—but not the assumption that every preliminary Stargate ambition will become a funded order.

Update: This article was updated to clarify that the KRW 14 trillion dividend includes a special distribution tied to Kioxia gains, and that the share repurchase program includes allocations for employee compensation.