...January 25, 2024 This report does not constitute a rating action. HONG KONG (S&P Global Ratings) Jan. 26, 2024--SK hynix Inc.'s financial performance for 2024 is likely to modestly exceed our previous expectation. The strength in sales for artificial intelligence (AI) chips as well as incremental DRAM requirement from on-device AI for PCs and smartphones are propelling the Korea-based company's performance. SK hynix's (###-/Stable/--) revenue surged nearly 50% year on year in the fourth quarter of 2023. This helped the supplier of memory chips to generate operating profit of about Korean won (KRW) 350 billion during the quarter, a reversal from operating loss of KRW 1.8 trillion in the third quarter. SK hynix also had strong free operating cash flow in the last quarter and reduced its net debt by KRW2.5 trillion. The company is deleveraging faster and is well on its way to a 1x debt-to-EBITDA ratio by the end of 2024, from our estimate of about 4x in 2023. We believe SK hynix's performance...
