Summary: SK Hynix Inc.

Consolidation in the DRAM industry should support Hynix's strong, albeit softer, operating performance over the next 12 to 24 months. Although we expect the global memory chip market to face downward pressure over the next 12 to 24 months, we believe the highly consolidated nature of the dynamic random access memory (DRAM) industry could limit the decline in SK Hynix Inc.'s operating performance. Under our base case, we expect Hynix's EBITDA to peak at around Korean won (KRW) 26 trillion–KRW30 trillion in 2018, and fall to around KRW16 trillion-KRW23 trillion over the next two years. We expect Hynix to sustain its low leverage, despite aggressive capital investments over the next 12 to 24 months. Hynix's capital spending is likely to

...Consolidation in the DRAM industry should support Hynix's strong, albeit softer, operating performance over the next 12 to 24 months. Although we expect the global memory chip market to face downward pressure over the next 12 to 24 months, we believe the highly consolidated nature of the dynamic random access memory (DRAM) industry could limit the decline in SK Hynix Inc.'s operating performance. Under our base case, we expect Hynix's EBITDA to peak at around Korean won (KRW) 26 trillion¡KRW30 trillion in 2018, and fall to around KRW16 trillion-KRW23 trillion over the next two years. We expect Hynix to sustain its low leverage, despite aggressive capital investments over the next 12 to 24 months. Hynix's capital spending is likely to remain high over the next two years, mainly to enhance its relatively weak position in the NAND flash market. However, we expect the company's strong operating cash flows to sufficiently cover the investments, which should result in strong financial metrics...

Summary