"Muscle show" before listing in the United States: SK Hynix (SKHY.US) cancels the long-term price ceiling, can it conquer Wall Street with absolute pricing power?

According to sources, SK Hynix is reportedly canceling the price ceilings in the long-term agreements (LTA) signed with customers in the near future. Sources say that unlike the current practice of setting price ceilings for long-term memory contracts, this new structure allows for the full reflection of the increase in spot prices in contract prices when market prices soar due to supply shortages. Analysts suggest that as the company extends contract terms with competitors like Samsung Electronics, suppliers' bargaining power is significantly strengthened. Normally, memory chip manufacturers offer price ceilings to customers in exchange for long-term orders to reduce price fluctuations. However, SK Hynix has essentially restructured its contracts to maximize profits during price increases. Sources say that the industry sees SK Hynix as the only major memory manufacturer that does not set price ceilings. The duration of long-term contracts is also being extended. Reports suggest that with increasing investments in AI servers and growing demand for high-performance memory including High Bandwidth Memory (HBM), SK Hynix and Samsung are extending the duration of their long-term supply contracts from the current one-year level to three to five years. Customers also show signs of locking in memory supply in the medium to long term, indicating suppliers are gaining bargaining power. Meanwhile, its US competitor, Micron Technology, Inc., has chosen a different strategy. In a strategic customer agreement (SCA) released last month, Micron set the price ceilings for its existing products at market price levels in the second quarter of 2026. The price floor aims to ensure profitability above any previous business cycle, to secure a certain level of profit even in deteriorating market conditions. The company aims to balance stability and profitability by leaving room for further price increases for new products. An industry insider pointed out that as investments in AI servers continue to expand, it is difficult for memory suppliers' bargaining power to be easily weakened. Even in long-term supply contracts, there is a trend emerging where the price structure is shifting in favor of suppliers, going beyond simply ensuring supply. On Thursday, SK Hynix announced that as part of South Korea's investment-driven plans in the semiconductor and AI fields, it will invest 100 trillion won (about $64.38 billion) in building memory chip and packaging factories. Meanwhile, Samsung announced a total investment plan of 140 trillion won (about $90 billion). Breaking the "price for quantity" norm, maximizing profits thoroughly In the traditional memory chip cycle, as price fluctuations resemble roller coasters, chip factories are often willing to set price ceilings to secure long-term stable orders from downstream customers. However, the arrival of the AI era has completely reversed the supply-demand balance. By canceling price ceilings, SK Hynix's long-term contracts will be directly linked to the skyrocketing spot market. Once market prices soar due to capacity shortages, SK Hynix can easily pass on cost premiums to tech giants like NVIDIA Corporation, converting the spot market gains one hundred percent into the company's net profit. In comparison, its US competitor, Micron Technology, Inc., still retains price ceilings in the latest strategic agreements. It is widely believed in the industry that SK Hynix is currently the only global storage giant daring to not set price ceilings in long-term contracts. This absolute control over pricing dominance is essentially based on the irreplaceability of its products. Canceling price ceilings has not scared off customers; on the contrary, due to the continuous surge in AI server investments, SK Hynix and Samsung are extending the original one-year long-term supply contracts to three to five years. For downstream server manufacturers, the more urgent task at hand is to secure capacity rather than worry about prices. This panicked locking behavior allows SK Hynix to lock in high certainty revenue in the medium to long term without taking on the risk of price drops. Along with its announced 100 trillion won ($64.38 billion) super-expansion plan, this "rising quantity and price" pricing model will unleash astonishing free cash flow. The "perfect muscle show" before heading to the US for listing SK Hynix's comprehensive cancellation of price ceilings will undoubtedly have a profound impact on its upcoming US listing. The cancellation of price ceilings directly reinforces its profit sustainability and growth elasticity the key indicators that US stock investors are most concerned about. Earlier, SK Hynix formally submitted an F-1 registration statement to the US Securities and Exchange Commission (SEC) on June 30, 2026, planning to list on the NASDAQ around July 10 (stock code: SKHY). This ADR issuance plan aims to raise up to $29.4 billion, potentially becoming one of the largest ADR issuances in history. This clever contract restructuring, happening at a crucial time when SK Hynix is seeking a US listing and raising nearly $30 billion, is no coincidence. For a long time, the "Korea discount" in the South Korean stock market has suppressed SK Hynix's valuation. To gain premium recognition from global capital on the NASDAQ, Hynix must prove itself not only as a cyclical hardware assembler but also as an "AI core water plant" with monopoly pricing power. By canceling price ceilings, SK Hynix has presented Wall Street with the most convincing offering: it not only has deep ties to core ecosystems like NVIDIA Corporation, but also has institutional tools to transfer costs and extract profits limitlessly in a bull market. This strategy of "canceling price ceilings + extending contract duration" has built a near-perfect business story for SK Hynix on the eve of its listing. As the AI infrastructure continues unabated in 2026, this capital resonance triggered by pricing power may just be the beginning.