...April 29, 2024 HONG KONG (S&P Global Ratings) April 30, 2024--Strong demand for high bandwidth memory (HBM) chips in the next one to two years should help SK hynix Inc. (###-/Stable/--) improve even further. The Korean semiconductor manufacturer's operating performance in the first quarter of 2024 exceeded our expectations and sets it up for further gains in profitability. SK hynix will likely maintain its lead in the high-growth HBM segment in the near term. Cuts to capital expenditure and increasing AI-related demand for high density solid-state drives (SSDs) should continue to drive improvements in NAND prices. We expect SK hynix to generate free operating cash flow of Korean won (KRW) 4 trillion¡KRW5 trillion for 2024, with operating cash flow of KRW19 trillion¡KRW20 trillion and capex of KRW14 trillion¡KRW15 trillion. However, the company needs potential capacity additions for HBM. Consequently, further hikes in capex could limit improvement in its financial standing. The company's...
