Global credit rating agency Standard & Poor's (S&P) upgraded Samsung Electronics' credit rating outlook from 'stable' to 'positive' on the 21st. S&P cited the structural growth of the artificial intelligence (AI) industry and the potential for enhanced earnings stability through long-term supply agreements (LTA) as the basis for the upgrade. The agency stated that Samsung Electronics will maintain very robust operating performance for at least the next 2 years, driven by strengthened technological competitiveness in high-bandwidth memory (HBM) and expanded market share in the foundry sector amid structural growth in the memory industry. Samsung's actual credit ratings remained unchanged, with long-term issuer and senior unsecured debt rated 'AA-' and short-term issuer rating at 'A-1+'. S&P noted that memory supply shortages are expected to persist for at least the next 2 years, creating favorable conditions for sustained profitability.
S&P Projects Samsung Electronics EBITDA to Quadruple by 2027
S&P projected Samsung Electronics' annual revenue will reach 683 trillion won in 2026 and approximately 821 trillion won in 2027. Earnings before interest, taxes, depreciation, and amortization (EBITDA) are expected to surge more than fourfold from approximately 91 trillion won in 2025 to 393 trillion won in 2026 and approximately 502 trillion won in 2027. S&P stated that Samsung Electronics' EBITDA is likely to remain at record-high levels for the next several years, as memory supply shortages are expected to remain unresolved for at least the next 2 years. The agency indicated it could upgrade Samsung Electronics' credit rating if positive factors materialize, including reduced semiconductor industry volatility through LTA contracts and Samsung's expanded position in the HBM market. S&P estimated the duration of Samsung's LTA contracts at 3 to 5 years, though the agency noted that the LTA expansion trend could reverse if supply-demand imbalances are resolved.
Samsung Electronics Resolves HBM3E Yield Issues and Achieves HBM4 Technical Advantage
S&P delivered a positive assessment of Samsung Electronics' HBM and foundry technological capabilities. The agency stated that Samsung Electronics secured a technical advantage over competitors by combining 1c DRAM with 4-nanometer base die in its latest HBM4 products. S&P also judged that Samsung has substantially resolved the yield issues experienced with the previous-generation HBM3E. Based on this strengthened HBM competitiveness, S&P assessed that Samsung Electronics is highly likely to expand market share in both graphics processing unit (GPU) and application-specific integrated circuit (ASIC) markets going forward. Regarding foundry operations, S&P analyzed that yield issues have likely normalized and that Samsung is expected to benefit from TSMC's production capacity constraints.
S&P Warns Memory Business Concentration Increases Cycle Vulnerability
S&P identified the deepening concentration in Samsung Electronics' memory business as a concern. The agency stated that the level of business diversification has significantly weakened due to Samsung Electronics' increased memory concentration. S&P noted that while the rapid growth of the memory business has led to unprecedented levels of profit and cash flow generation, it could become a factor that increases vulnerability to industry downturns when the memory cycle reverses in the future.
FAQ
What credit rating outlook did S&P assign to Samsung Electronics on the 21st?
S&P upgraded Samsung Electronics' credit rating outlook from 'stable' to 'positive' on the 21st, citing structural growth in the AI industry and potential earnings stability through long-term supply agreements. The actual credit ratings remained unchanged at 'AA-' for long-term issuer and senior unsecured debt, and 'A-1+' for short-term issuer rating.
What EBITDA figures did S&P project for Samsung Electronics through 2027?
S&P projected Samsung Electronics' EBITDA will increase from approximately 91 trillion won in 2025 to 393 trillion won in 2026 and approximately 502 trillion won in 2027, representing more than a fourfold surge. The agency stated that EBITDA is likely to remain at record-high levels for the next several years due to persistent memory supply shortages.
What technical advantages did S&P identify in Samsung Electronics' HBM products?
S&P stated that Samsung Electronics secured a technical advantage over competitors by combining 1c DRAM with 4-nanometer base die in its latest HBM4 products. The agency also judged that Samsung has substantially resolved the yield issues experienced with the previous-generation HBM3E, positioning the company to expand market share in GPU and ASIC markets.
