Reflecting the AI and HBM boom...performance improvement expected to continue
Global credit rating agency S&P Global Ratings has upgraded the credit rating of SK hynix, judging that its strong performance will continue over the next one to two years.
On the 5th, S&P raised SK hynix's long-term credit rating by one notch to "BBB+" and assigned a "positive" outlook. The decision reflects its analysis that highly profitable HBM (high bandwidth memory) sales will continue to grow and that the supply-demand imbalance in the memory market will persist for the time being, supporting strong prices.
S&P projected that demand for HBM, server DRAM, and eSSD (enterprise solid-state drive) will continue to increase, driven by hyperscalers' expanding investment in AI.
On the supply side, however, it noted that even if major players expand capital expenditures, the full-scale ramp-up of new fabs is not expected until after 2028, making it highly likely that supply shortages will continue until then.
Based on these market conditions, S&P estimated SK hynix's annual revenue at 162 trillion won this year and 179 trillion won next year. It forecast EBITDA (earnings before interest, taxes, depreciation and amortization) at 112 trillion won this year and 116 trillion won next year. These figures are far above last year's results of 94 trillion won in revenue and 61 trillion won in EBITDA.
S&P also said, "SK hynix maintains a solid market position in both the HBM and commodity memory markets," citing its proprietary MR-MUF (mass reflow molded underfill) packaging technology and its product technology leadership as differentiated strengths over competitors.
However, it pointed to intensifying competition, a potential slowdown in the AI industry, and the possibility of reduced capital investment by hyperscalers as potential risks. Nevertheless, S&P expects SK hynix to maintain robust operating cash flow, backed by a significant improvement in memory profitability.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
