S&P affirms Hynix Semiconductor

Standard & Poor's said it affirmed its CCC+ long-term corporate credit rating on Hynix Semiconductor Inc. and removed the rating from CreditWatch, where it was placed on Nov. 28, 2003. At the same time, S&P affirmed its CCC+ long-term credit ratings on Hynix Semiconductor Manufacturing America Inc. and also removed the ratings from CreditWatch.

The outlooks are positive.

S&P said the affirmations follow the announcement by Hynix Semiconductor that it has cancelled plans to sell its System IC business, the company's remaining nonmemory chip division, due to an undervalued sales price amid improving industry conditions.

"Hynix's credit profile is expected to continue strengthening due to ongoing restructuring efforts and the easing of its liquidity shortage, supported by favorable industry conditions for both memory and nonmemory businesses," said S&P credit analyst Eun Jin Kim. "Nevertheless, Hynix will need to increase its already high capital investment requirements in the medium term to maintain competitiveness against companies such as Samsung Electronics Co. Ltd. and Micron Technology Inc."

S&P said the rating on Hynix could be raised if the company shows improved credit protection measures and displays clear business strategies that incorporate the System IC segment.

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