이 기사는 2021년 05월 07일 08:03 thebell 에 표출된 기사입니다.

SK Hynix’s continued investment in chip-making facilities has brought its gross debt to more than 13 trillion won ($11.5 billion), the company’s largest ever, increasing the pressure on its financial profile.

The South Korean chipmaker’s total debt stood at 13.6 trillion won at the end of March, up 21% from three months ago. Its debt to assets ratio rose from 22% to 26% in the same period, and net debt to assets ratio also climbed from 12% to 15%.

The significant increase in the debt level is largely due to capital expenditure spending. The company’s investment in its chip factories in Cheong-ju and Icheon continued in the first quarter.

SK Hynix said in a conference call last month that it would increase capital expenditure this year in response to the global chip shortage. It is also considering expanding its foundry business. Noh Jong-won, senior vice president and head of corporate strategy & planning at SK Hynix, said, “We are reviewing options to bolster investment in 8-inch foundry lines.”

SK Hynix has capitalized on low interest rates and its solid credit profile to raise funds in the corporate bond market. It sold $2.5 billion global bonds earlier this year, and also raised 1.18 trillion won last month in a more than three times oversubscribed bond sale.

However, the company’s spending needs are likely to grow. SK Hynix last year agreed to acquire Intel’s NAND memory business for $9 billion with a first $7 billion payment due at the end of this year. The company is expected to fund it via a combination of cash and debt.

SK Hynix also signed a 4.75 trillion won contract earlier this year to buy extreme ultraviolet lithography machines from Dutch semiconductor equipment supplier ASML over the next five years.

The positive is that Kioxia’s planned listing could free up some cash for SK Hynix’s future spending. SK Hynix invested about 4 trillion won in Toshiba's former memory business in 2017 as one of the investors in the Bain Capital-led consortium. The investment included 2.7 trillion won in equity with the remainder invested in the form of convertible bonds.

Kioxia was looking to float its shares last year, but delayed its initial public offering plans to 2021 due to unfavorable market condition. SK Hynix said it would sell its equity interest in Kioxia in the planned IPO, while holding convertible bonds, which would give the company a 15% stake if converted into shares, for a strategic partnership with Kioxia.

SK Hynix’s partial exit from Kioxia in the planned IPO would generate a bumper profit, possibly helping to fund the acquisition of Intel’s NAND unit. However, there is still uncertainty over the IPO timeline.

SK Hynix had cash and cash equivalents of 5.99 trillion won at the end of March, up by more than 1 trillion won from 4.95 trillion won at the end of 2020. (Reporting by Hye-ran Kim)