ID :
185377
Mon, 05/30/2011 - 14:54
Auther :

Fitch upgrades Hynix's outlook to positive

(ATTN: CORRECTS outlook in headline, lead) By Kim Young-gyo HONG KONG, May 30 (Yonhap) -- Fitch Ratings said Monday it has upgraded its rating outlook for Hynix Semiconductor Inc., the world's second-largest maker of memory chips, to "positive" from "stable." The outlook revision reflected the South Korean chipmaker's robust operating results and the notable improvement in its financial profile during 2010, the global credit appraiser said. "Despite a sharp erosion in memory prices since the second quarter of last year, Hynix's 2010 revenues grew 53 percent to 12.1 trillion won (US$11.2 billion)," Fitch said in a release. "More importantly, Fitch acknowledges the deleveraging progress the company has made over the past two years with positive free cash flow generation in 2009 and 2010." Fitch expected the stable operating environment to continue throughout 2011 despite price declines likely to continue for both dynamic random access memory (DRAM) chips and NAND flash memory. "Although weak demand and sustained over-supply will continue to put pressure on DRAM prices, price erosion is unlikely to accelerate given DRAM manufacturers' conservative capital expenditure allocation for commodity DRAM," the release said. The proliferation of smart devices, such as smartphones and tablet PCs, has enabled Hynix to mitigate the negative impact from weak PC demand, and the company's average selling prices have been supported by an increasing share of specialty DRAMs used in smart devices and servers, Fitch noted. The credit rating agency added that the rapid penetration of such smart devices will continue to provide strong growth momentum for NAND flash memory. Under this environment, Hynix will likely improve its revenue mix by increasing the NAND revenue share close to 25 percent in 2011 from 17 percent in 2010, it predicted. According to the report by Taiwan-based DRAMeXchange Technology Inc., Hynix Semiconductor claimed a 22.9 percent share of the global DRAM market in the January-March period. Its larger homegrown rival Samsung Electronics Co. accounted for 39.8 percent.

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