SK Hynix says LTAs are typically 5-year contracts

Jul 29, 2026, 10:15 am

SK Hynix announced that the term for long-term agreements (LTAs) currently being pursued with customers is around five years. In particular, the company explained that it is strengthening demand visibility by putting safeguards in place, such as deposits.

During its second-quarter earnings call on July 29, SK Hynix stated, "The duration of LTA contracts pursued with customers is typically five years, though it may vary depending on the customer and product."

The company explained that contract terms, including pricing, are negotiated based on product structures and collaborative relationships. SK Hynix added, "We are taking into account customers' actual purchasing capacity and setting up safeguards, such as deposits tied to purchase commitments, to reduce uncertainty from short-term market volatility and enhance demand visibility," adding, "This supports customers in establishing highly reliable mid-to-long-term demand plans, while helping us efficiently operate investment and production plans based on that visibility."

The company further stated, "While it is difficult to disclose the exact proportion of LTAs relative to total sales, we will manage it at an appropriate level in consideration of market conditions and customer demand," noting, "Through this, we plan to enhance downside performance stability."

It also added, "We are securing stable profitability centered on HBM, and long-term contracts with key customers including Nvidia support this structure."

In particular, SK Hynix explained that it is pursuing strategic cooperation with customers and expanding production capacity based on demand visibility. Consequently, the company views the likelihood of mid-to-long-term investment expansion directly leading to oversupply as limited.

Lee Ji-sun

#SK Hynix #LTA