이 기사는 2021년 07월 06일 07시58분 thebell에 표출된 기사입니다

SK hynix, which will take over Intel's NAND flash unit for around 10 trillion won ($8.84 billion), is expected to benefit from the acquisition in the longer term, bucking concerns that the deal will only come as a burden on the South Korean chipmaker.

NICE Investors Service, the country’s credit ratings agency, has recently upgraded SK hynix’s credit rating outlook from negative to stable while maintaining its credit rating at AA. Korea Ratings Corporation and Korea Investors Service already have assigned SK Hynix a AA grade with a stable outlook.

Last year, NICE Investors Service downgraded SK hynix’s outlook from stable to negative, citing possible financial burden after the acquisition of Intel’s NAND flash business. The credit ratings agency has upgraded SK hynix’s credit rating outlook six months after its previous revision. NICE Investors Service explained that the company’s free cash flow could partially cover the financial burden stemmed from the acquisition thanks to the booming memory semiconductor industry.

SK hynix will now be able to raise funds with more favorable conditions. The company’s financial burden has increased due to its purchase of the new semiconductor manufacturing equipment along with the first payment of 8 trillion won for the acquisition at the end of the year.

The chipmaker has continued to make investments for its future even when its profit-generating ability has weakened due to the sluggish semiconductor industry since 2019. It invested in its two plants, M15 in Cheognju, North Chungcheong Province and M16 in Icheon, Gyeonggi Province, and purchased EUV (extreme ultraviolet lithography technology) equipment. Its debt ratio, which was 37.1% in 2020, rose to 43.4% at the end of March, with its debts standing at 15.33 trillion won, up around 19% compared to the end of 2020.

Although the company has spent a lot of money on capital expenditures, SK hynix has maintained its financial stability. The company’s net borrowing ratio has been stably managed at 12.4%, with cash and cash equivalents amounting to 5.09 trillion won. The chipmaker is expected to be able to finance a part of the acquisition required by the end of this year through its own fund flow.

Credit rating agencies widely said that SK hynix is likely to maintain strong financial stability in the mid- to long-term as it can enhance its cash-generating ability thanks to its diversified source of revenue. The company is especially expected to benefit from the acquisition of Intel’s NAND flash business. Its overall business risk is likely to be reduced as the imbalance business structure, which is focused more on the DRAM business, will be resolved, according to credit rating agencies.

The outlook is also rosy thanks to a rebound in NAND flash price since the second quarter of this year after the company recorded an operating loss of 2 trillion won from 2018 to 2020 due to a falling NAND flash price. SK hynix’s NAND business is expected to swing to a profit in the second half of this year.

NICE Investors Service noted the acquisition of Intel’s NAND flash business will help SK hynix improve profitability by diversifying product portfolios in the NAND market, such as an increase in sales of enterprise solid state drives (SSDs), which are high value-added products. (Reporting by Hye-ran Kim)