The ratings on Korea-based Hynix Semiconductor Inc. (B+/Watch Pos/--) reflect the highly cyclical nature of the semiconductor industry, the company's ongoing need for capital expenditures, and the challenge of keeping up with rapid advances in technology. These negative factors are offset by the company's solid position in the global dynamic random access memory (DRAM) industry, strong technological capabilities and good operating efficiency, and expected improvement in financial flexibility through a capital increase. Hynix is the second-largest supplier of DRAM chips with about 23% global market share in the first half of 2011. Industry leader Samsung Electronics Co. Ltd. (A/Stable/A-1) holds about 40% of the market. Hynix also maintains the fourth-largest position in NAND flash memory with about a 13% share.
