Thought Leadership
SK hynix has secured long-term agreements with 14 major customers, covering more than half of its production capacity for 2027 and 2028. The supply shortage is expected to persist through 2030.
South Korean memory chipmaker SK hynix says its DRAM and High Bandwidth Memory (HBM) production is effectively sold out through 2029. CEO Kwak Noh-Jung made the announcement during the company’s third-quarter 2026 earnings call on October 28, following a record-breaking quarter.
“Taking into account both the LTA volumes we have already secured and those currently under specific discussion with clients, both DRAM and high-bandwidth memory (HBM) volumes are fully booked for the next three years through 2029.”
Kwak Noh-Jung, CEO of SK hynix
Long-Term Agreements With Cloud Providers
According to SK hynix, long-term agreements with 14 major customers, including leading cloud providers, already cover more than 50 percent of its total production capacity for 2027 and 2028. CFO Kim Woo-hyun expects it will be difficult to fully meet customers’ volume requirements in the short term. The company anticipates that the supply shortage will continue through 2030.
SK hynix plans to significantly increase its investments in 2027 compared with 2026. The additional spending will support the expansion of advanced manufacturing processes and ramp up production at its new facility in Yongin. The first cleanroom at the site is scheduled to become operational in the first quarter of 2027.
The company is also building an advanced packaging facility in Cheongju, which is expected to be completed by the end of 2027. In addition, SK hynix plans to open another facility in the US state of Indiana, with operations scheduled to begin in the second half of 2028.
Less Capacity for Conventional Memory
Major memory manufacturers SK hynix, Samsung and Micron are increasingly shifting production capacity toward HBM for AI accelerators, which offers higher profit margins. This leaves less capacity available for conventional memory used in PCs, smartphones and servers. Micron recently said it could not predict when supply would catch up with demand. Chinese manufacturer YMTC also expects NAND flash shortages to persist until around the end of 2029.
According to Gartner, memory prices have more than doubled over the past 12 months. The impact is already being felt in the end-device market. Global PC shipments fell by 20.1 percent in the third quarter, according to IDC. Counterpoint Research reported a 20 percent decline in global smartphone shipments over the same period.
(Editorial Team)
