Moody's Upgrades SK Hynix's Credit Outlook from 'Negative' to 'Stable'

Maintaining Credit Rating Baa2

Global credit rating agency Moody's announced on the 14th that it has upgraded SK Hynix's credit rating outlook from 'negative' to 'stable'. The issuer and senior unsecured credit rating of 'Baa2' was maintained.

Moody's explained, "SK Hynix's recent profits and cash flow have significantly improved thanks to rising memory prices and competitiveness in the artificial intelligence (AI) sector," adding, "We expect this improvement trend to continue over the next 12 to 18 months."

SK Hynix Icheon Campus view. [Photo by SK Hynix]

Moody's also expects SK Hynix's debt to decrease despite increased CAPEX (capital expenditures) for expanding AI memory production capacity. In fact, SK Hynix reduced its borrowings by 4.2 trillion won in the second quarter of this year.

Additionally, Moody's assessed that "with DRAM technologies such as High Bandwidth Memory (HBM) and server-grade Double Data Rate 5 (DDR5), combined with competitiveness in the NAND business including enterprise Solid State Drives (eSSD), the company's EBITDA is expected to increase to 39 trillion won by 2025."

Earlier on the 7th of this month, global credit rating agency S&P also upgraded SK Hynix's credit rating from 'BBB-' to the highest ever rating of 'BBB', focusing on the company's performance growth and stable cash flow.