S&P turns SK Hynix view to stable

S&P said it revised its outlook for SK Hynix Inc. to stable from positive and affirmed the BBB- ratings on the company and its senior unsecured notes.

“SK Hynix's revenue and EBITDA will fall in the second half of 2022 and in 2023 due to rapidly worsening conditions in the memory chip market. The company saw very robust revenue and EBITDA growth until the first half of 2022. However, tough macroeconomic conditions and weak customer spending are hitting demand for the end-use market of PC and mobile phones. We expect PC shipments globally to decline by 9%-14% in 2022 and continue to fall in the first half of 2023. Similarly, smartphone shipments could dip by 5% in 2022 and have flat to a low-single-digit percentage decline in 2023,” S&P said in a press release.

The weaker outlook reflects an expectation that the company will maintain a ratio of adjusted debt to EBITDA of 1x–2x over the next one to two years despite the downcycle in the memory chip market.

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