Radio Free Mobile Founder Richard Windsor: Long-Term Storage Contracts Cannot Stop the Cycle Reversal
Independent technology analyst Richard Windsor of Radio Free Mobile offers a rebuttal after SK Hynix announced the end of the storage cycle: while the industry is migrating customers to long-term agreements (LTAs) and SK Hynix has locked in 50% of its capacity for 2027-2028, these contracts cannot prevent price crashes during oversupply because suing customers for breach of contract is commercially unfeasible in a highly concentrated commodity market.
SK Hynix delivered a stellar performance report for Q3 2026: revenue reached KRW 104.6 trillion and earnings per share were KRW 86,300, both exceeding market expectations. The company once again declared that the memory cycle has ended, forecasting that demand will exceed its supply capacity until 2030, with capacity for 2027 already sold out. Independent technology analyst and Radio Free Mobile founder Richard Windsor agrees that the outlook for the next twelve months remains strong, but he believes the industry's judgment that the cycle has ended will come back to haunt these companies around 2028.
Windsor's core argument revolves around long-term agreements. The storage industry is leveraging its current market dominance to migrate customers to long-term contracts with relatively fixed prices and volumes; SK Hynix has already secured 50% of its production capacity for 2027 and 2028 under these agreements. He argues that these contracts can indeed be executed as long as DRAM prices remain flat or stable, but the problem arises at the moment the cycle reverses.
His reasoning mechanism is as follows: once the industry enters a state of oversupply (which he believes is inevitable), someone will inevitably break ranks, compete for customers by offering lower storage prices, and customers will subsequently breach their contracts. The key constraint here lies in the market structure—the storage market is fairly concentrated, and the last thing one wants to do in a commodity market is to start suing customers for breach of contract. Therefore, these contracts are largely ineffective at preventing a price crash.