S&P Global Ratings upgraded SK Hynix Inc.’s long-term issuer credit rating to A- from BBB+, citing the company’s strengthened operating performance driven by AI memory demand. The agency also raised the issue credit rating on the South Korean chipmaker’s senior unsecured debt and assigned a positive outlook.
The upgrade reflects SK Hynix’s robust profitability amid a surge in memory prices, which S&P noted have climbed roughly four to five times in the first half of 2026. The rating agency expects the company’s strong performance to persist through 2028, supported by sustained high prices for DRAM and NAND, as well as its competitive position in high bandwidth memory and conventional memory segments.
S&P highlighted SK Hynix’s recent completion of about 10 long-term supply agreements with major cloud service providers. These contracts, which include prepayments, price floors, and volume commitments, are expected to reduce demand volatility tied to seasonal and product cycles.
The rating action follows projections that hyperscalers’ capital expenditure will exceed $1.3 trillion in 2027, more than quadrupling their 2024 spending. This surge is anticipated to drive 20%–25% annual growth in total memory demand for DRAM and NAND across 2026 and 2027.
SK Hynix plans to expand production capacity at its Yongin and Cheongju fabs, with capital expenditure set to rise to 49 trillion Korean won in 2026 and 65 trillion won in 2027, up from 28 trillion won in 2025. S&P forecasts the company’s annual discretionary cash flow will exceed 100 trillion won over the next two years, further strengthening its net cash position.
The positive outlook could be revised to stable if demand weakens due to reduced AI infrastructure investments by hyperscalers or if SK Hynix pursues acquisitions or increased capital spending that push its debt-to-EBITDA ratio above 1x.
