KOSPI Soars 6.6% Back Above 6,000 as SK Hynix Record Profit and $75 Billion Payout Plan Ignite Chip Rally

South Korean stocks posted their biggest gain in about three months on Wednesday. The benchmark index jumped back above the 6,000 mark after chipmaker SK Hynix reported record quarterly earnings and unveiled one of the largest shareholder return programs in corporate history.

The KOSPI closed up 374.10 points, or 6.63%, at 6,012.44, after touching an intraday high of 6,032.28. The tech-heavy KOSDAQ rose 27.45 points, or 3.69%, to 771.28.

The rally followed a 3.1% gain on Tuesday, giving the KOSPI a two-day advance of nearly 10%.

Record quarter for SK Hynix

SK Hynix, the world's leading supplier of high-bandwidth memory chips used in artificial intelligence processors, reported preliminary third-quarter results before the market opened:

Revenue of 104.6 trillion won, up 328% from a year earlier and the company's first quarter above 100 trillion won Operating profit of 83.3 trillion won, up 632% from a year earlier, for an operating margin of 80% Net income of 39.8 trillion won, up 216% from a year earlier

The company said demand for memory chips used in AI data centers drove the results. Shipments of its latest HBM4 chips began in earnest, and sales of server DDR5 memory and data center storage products also rose.

SK Hynix said it expects memory demand to outstrip supply through 2030. It said it has signed long-term agreements with 14 major customers, including global cloud providers, covering more than half of its planned production for 2027 and 2028.

Massive shareholder returns

Investors cheered the company's shareholder return plan. SK Hynix said it targets about 100 trillion won ($75 billion) in total returns for 2026. That includes cash dividends of at least 30 trillion won and share buybacks and cancellations of at least 60 trillion won.

For the third quarter, its board approved:

A cash dividend of 20,000 won a share, made up of a 10,000-won regular dividend and a 10,000-won special dividend funded by gains from its investment in Japanese memory maker Kioxia A 20 trillion won share repurchase, half of which will be canceled

Chief Executive Kwak Noh-Jung said the company's principle is to share most of the gains from successful strategic investments with shareholders. The company also said it had dropped plans to review an initial public offering of its Solidigm storage unit.

SK Hynix ended the quarter with net cash of 98.7 trillion won.

Chipmakers lead the charge

The results set off a buying spree in chip stocks:

SK Hynix: soared 10.89% to 1.49 million won. Samsung Electronics: jumped 9.01% to 242,000 won, ahead of its own earnings on Thursday. SK Square: SK Hynix's parent company rose 11.23% to 921,000 won. Samsung Electro-Mechanics: gained 8.74% to 1.3 million won.

The surge triggered a "sidecar" for the second straight session. The Korea Exchange paused program buy orders for five minutes shortly before 11 a.m. after KOSPI 200 futures rose at least 5%.

Advancing stocks outnumbered decliners 580 to 288. Turnover reached 19.83 trillion won.

Foreigners and institutions buy

Foreign investors bought a net 815.83 billion won of KOSPI shares and institutions bought a net 960.79 billion won. Individual investors sold a net 1.8 trillion won, taking profits after the rally.

Lee Jae-won of Yuanta Securities said the results showed that "strong demand for AI chips can translate into solid operating profits and shareholder returns." He said that eased concerns about a peak in the memory chip cycle.

Recovering from a rout

The rally is a sharp turnaround for a market that had been battered in recent weeks. The KOSPI fell more than 35% from its June peak amid heavy foreign selling, the end of large buyback programs and doubts about the payoff from AI spending. It plunged 5.46% in a single session on Oct. 13.

Investor sentiment improved this week after Anthropic, the developer of the Claude AI models, filed for a U.S. initial public offering, renewing optimism about AI-related revenue.

Won weakens, yields rise

The won fell 10.7 won to 1,337.7 per dollar as of 3:30 p.m. Bond prices fell, pushing the three-year Korean government bond yield up 4.1 basis points to 3.799%.

What's next

Investors now turn to Samsung Electronics' quarterly results on Thursday. The U.S. Federal Reserve's interest rate decision is due early Thursday, Seoul time.

Major U.S. technology companies, including Alphabet, Microsoft, Amazon and Meta Platforms, are also reporting results this week. Their AI infrastructure spending plans are a key driver of demand for Korean memory chips.