[Edaily Marketin Reporter LEE GEON-EOM ] SK hynix(000660)has decided on a large-scale rights offering worth approximately 45.5 trillion won. Analysts note that while strengthening its financial foundation through capital expansion is positive for its credit rating, further proof of the stability of its operating cash flow is needed to upgrade its rating to the top-tier “AAA.” They point out that earnings volatility remains inherent due to the infrastructure investment schedules of hyperscalers.

Korea Ratings (Han Shin Pyeong) made this statement on the 25th regarding SK hynix’s decision, approved by its board of directors the previous day, to conduct a rights offering worth approximately 45.5 trillion won. This rights offering will be conducted via a third-party allotment to depositary institutions, and the newly issued shares (17.79 million common shares) will be listed on the Nasdaq market in the form of American Depositary Receipts (ADRs). The funds raised are scheduled to be used entirely for capital expenditures, including the construction of the Phase 1 fab at the Yongin Semiconductor Cluster and the Cheongju P&T Advanced Packaging fab, as well as the acquisition of extreme ultraviolet (EUV) lithography equipment.

Han Shin Rating noted that this large-scale capital increase took place amid a phase of expanded capital investment to meet demand for artificial intelligence (AI) memory. It assessed the move positively from a creditworthiness perspective, expecting that the capital increase would enhance overall financial resilience by expanding net cash and improving financial leverage ratios.

However, the agency pointed out that challenges remain to be overcome before a credit rating upgrade can be considered. Since an “AAA” credit rating signifies the highest level of stability—where the ability to repay debt remains unshaken by any reasonably foreseeable future environmental changes—the analysis indicates that, beyond improving financial buffers, it is essential to confirm the stability of actual operating cash flows.

Currently, the memory industry is seeing an increasing concentration of business toward hyperscaler clients. Due to the gap between rising costs resulting from these clients’ large-scale AI infrastructure investments and the pace at which actual profits are generated, uncertainty persists regarding whether high levels of capital expenditures (CAPEX) will be sustained. Furthermore, the significant increase in investment in semiconductor production facilities compared to the past—driven by factors such as process scaling—is another factor heightening the importance of securing stable cash flow.

Accordingly, Han Shin Rating cited the “long-term supply contract” structure mentioned in Micron’s earnings announcement on the 25th as a positive industry indicator. Micron has stated that, in the long term, more than 50% of its revenue will be generated through long-term supply contracts that include minimum purchase volume obligations and customer deposits.

Kim Jeong-hoon, a senior analyst at Han Shin Rating, explained, “This large-scale rights offering is positive for the credit rating as it strengthens the company’s financial foundation through capital expansion during a phase of increased capital expenditure to meet AI memory demand,” but added, “As the memory industry’s business focus on hyperscalers is intensifying, there is inherent volatility in earnings due to fluctuations in customers’ investment schedules.”

He continued, “Since an AAA credit rating signifies a very high level of stability, we plan to review the credit rating by comprehensively considering the scope and specific terms of long-term supply contracts—as confirmed through future earnings announcements—as well as the effect of this rights offering on improving financial buffers.”