SK Hynix hopes long-term deals bring stability to memory

The memory shortage is unlikely to subside any time soon, but SK Hynix says a flurry of long-term deals with its biggest customers might help stabilise volatile prices after it saw a 557% jump in operating profit.

The South Korean chip company said it had concluded long-term agreement (LTA) negotiations with 10 customers in a bid to secure “mid to long-term supply stability” and support its expansion plans.

In an earnings call Tuesday, Head of Investor Relations Park Seong-Hwan said the LTAs were “designed to address price volatility” and “support contract fulfillment and enhance the visibility and reliability of customers’ mid to long-term demand plans."

LTAs tended to be around five-years long but differed between customers, the company said.

The company is ramping up plans to increase capacity at its manufacturing sites and said it now expects CapEx to reach the “high ₩40 trillion ($27.6 billion) range” as it funds plans such as a new NAND production facility and a new semiconductor cluster in South Korea.