Friday, June 15, 2007
Moody's Investors Service said it has upgraded Hynix Semiconductor Inc's corporate family rating to 'Ba2' from 'Ba3', citing the South Korean company's improved financial profile and its ability to sustain its sound operating performance over the industry cycle.
The outlook is stable, the rating agency said.
'Hynix will maintain its strong position in the global dynamic random access memory (DRAM) industry over the medium term,' Moody's (nyse: MCO - news - people ) said. 'In addition, it will remain competitive due to its continual migration into 66nm (nanometer) processing technology and the fact that its planned 12-inch wafer production capacity in China and Korea will be coming on stream over the next 1-2 years,' said Ken Chan, Moody's lead analyst for Hynix.
He added that Hynix also has the flexibility to switch production capacity between DRAM and NAND flash, which could partially mitigate cash flow volatility.
Moody's added that Hynix is projected to generate negative free cash flows, given its need to incur large capex plans over the next few years, but it also has stronger access to banking financing and capital markets.
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