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Investing.com -- Moody’s Ratings has affirmed SK Hynix Inc (KS:000660).’s Baa2 issuer and senior unsecured ratings while changing the outlook to positive from stable, the agency announced Thursday.
The improved outlook reflects SK Hynix’s strong earnings and improving balance sheet, which Moody’s expects to continue over the next 12-18 months. The company’s leadership in the high-bandwidth memory (HBM) chip segment is a key factor supporting this positive view.
"We expect demand for artificial intelligence chips will remain strong over the next few years, because large technology companies continue to invest heavily in AI," said Gloria Tsuen, Moody’s Vice President and Senior Credit Officer.
Moody’s projects SK Hynix’s adjusted EBITDA to increase to KRW44 trillion-KRW51 trillion annually in 2025-26, up from around KRW36 trillion in 2024. This robust performance is expected to reduce the company’s adjusted debt/EBITDA ratio to approximately 0.5x in 2025-26 from around 0.8x in 2024.
During the first six months of 2025, SK Hynix reported impressive financial results with revenue increasing by 38% and operating income nearly doubling to KRW16.7 trillion compared to the same period last year. The company’s reported net debt declined by KRW3.6 trillion to KRW4.9 trillion during this period.
Despite these positive developments, Moody’s noted several uncertainties that could impact SK Hynix’s performance, including potential US tariffs on semiconductors, disruptions to its production bases in China due to heightened US restrictions, and intensifying competition in the HBM segment.
The Baa2 rating is supported by SK Hynix’s strong competitive position in the global memory chip industry, its leadership in HBM for AI applications, and its strengthening position in the DRAM segment. These strengths help offset risks associated with industry cyclicality and the large investments required to remain competitive.
Moody’s indicated that an upgrade could occur in the next 12-18 months if SK Hynix maintains its strengthened market positions, strong profitability, positive free cash flow, and conservative financial management.
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