SK Hynix Secures Five-Year Chip Demand With Long-Term Deals Across Big Tech

SK Hynix said it has locked in long-term supply agreements (LTAs) with more than 10 major customers, a move the company says will sustain demand for its memory chips through 2027 and quiet worries about a potential slump once the current artificial intelligence investment cycle cools.

Song Hyun-jong, president of SK Hynix's Corporate Center, disclosed the deals during the company's second-quarter earnings call on July 29. He said negotiations with the initial group of key accounts have been finalized and that discussions with additional major customers are continuing, without naming the companies involved.

An LTA typically locks in supply of specific memory products for around five years, giving both sides more predictability than short-term spot contracts. For SK Hynix, the agreements include customer purchase commitments and financial safeguards such as deposits, which the company says improve the reliability of its long-term demand forecasts. Pricing under the contracts can still adjust to market conditions, and SK Hynix said the structure leaves room to capture extra demand if the market strengthens further.

The announcement comes amid persistent supply tightness in high-bandwidth memory (HBM) and other chips used in AI servers, where demand has outrun output even as manufacturers add capacity. Because new cleanrooms take years to build and qualify, analysts have said any near-term easing of the supply crunch is unlikely, reinforcing the case for multi-year contracts that reduce volatility for both chipmakers and buyers such as Nvidia. Days before the earnings call, SK Group said it would work with Nvidia and other major technology firms on a five-year, $750 billion plan for long-term supply of advanced memory.

To keep pace with the deals, SK Hynix is accelerating construction at its new M15X fab in Cheongju, making early investments so it can ramp up production quickly once the cleanroom at its first Yongin facility opens in early 2027. The company is also pursuing longer-horizon projects, including the P&T7 packaging and testing plant in Cheongju, a new NAND facility called M17, and a planned semiconductor cluster in Gwangju.

Despite the expansion push, SK Hynix said it intends to keep capital spending tied closely to confirmed customer demand rather than build ahead of orders, describing this as central to maintaining investment discipline. Capital expenditure for 2026 is expected to land in the high-40 trillion-won range, the company said.

"Capacity expansion is being carried out based on customer demand," Song said, adding that the approach makes it unlikely current investment plans would trigger oversupply. SK Hynix did not disclose what share of total sales the long-term agreements now cover, saying only that it plans to keep that proportion at an appropriate level depending on market conditions and customer needs.