[Edaily Marketin Reporter LEE GEON-EOM ] SK hynix(000660)has successfully improved its credit rating, driven by the memory semiconductor boom.

According to the credit rating industry on the 4th, global credit rating agency Moody’s upgraded SK hynix’s issuer rating and senior unsecured bond rating from “Baa1” to “A3” the previous day. The credit rating outlook remained “Stable,” unchanged from the previous rating.

Moody’s cited favorable memory market conditions driven by expanded investment in artificial intelligence (AI) infrastructure, as well as SK hynix’s strong profitability and improved cash generation, as the key factors behind the upgrade.

Moody’s explained, “This upgrade reflects our outlook that SK hynix will maintain strong profitability and cash flow over the next 12 to 18 months, thereby strengthening its financial soundness and flexibility and securing significant buffers to prepare for an upcoming industry downturn.”

The analysis indicates that massive investments by hyperscale cloud providers are robustly driving demand for advanced memory products such as High-Bandwidth Memory (HBM) and server DRAM, while the reallocation of production capacity toward AI memory is constraining the supply of general-purpose memory, thereby supporting overall price increases.

In fact, SK hynix’s earnings and financial health are projected to improve significantly. According to Moody’s, SK hynix’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) is expected to surge from approximately 65 trillion won in 2025 to about 274 trillion won in 2026 and approximately 374 trillion won in 2027.

Adjusted net cash, which stood at approximately 67 trillion won (estimated) as of the end of the first half of this year, is also expected to expand to the target level of over 100 trillion won over the next 12 to 18 months. Analysts believe this substantial net cash will serve as a key buffer to support large-scale investment needs and mitigate the cyclical risks of the memory industry.

However, factors such as the cyclical nature of the memory chip industry, its high capital intensity, the burden of ongoing technology migration and capital expenditures (CAPEX), and pressure from competitors such as China acted as constraints in the credit rating assessment.

Moody’s explained that, reflecting these industry characteristics, it assigned SK hynix an “A3” rating—three notches below “Aa3,” which is the appropriate rating based on its own assessment metrics. Going forward, SK hynix’s credit rating is expected to be directly influenced by improvements in demand visibility and the company’s financial management capabilities.

Moody’s stated, “Further credit rating upgrades are possible if profit volatility decreases due to improved demand visibility or a moderation in industry cyclicality, and if conservative financial management—such as maintaining a substantial net cash position relative to large-scale capital expenditures—is demonstrated over the long term,” adding “Conversely, the credit rating could be downgraded if net cash decreases significantly due to deteriorating profitability, aggressive investment, or excessive shareholder returns; if the EBITDA-to-adjusted debt ratio consistently exceeds 1.0x; or if the company’s market position is undermined by delays in technology transitions,” the agency said.