The ratings on Korea-based semiconductor maker SK Hynix Inc. (Hynix; BB-/Stable/--) reflect high cyclical conditions in the semiconductor industry, the company's ongoing capital expenditure requirements, and the challenge of keeping up with rapid advances in technology. Offsetting these negative factors are the company's solid position in the global market for dynamic random access memory (DRAM) and NAND flash memory, strong technological capabilities, good operating efficiency, and improved financial flexibility through a recent capital increase. On Feb. 14, 2012, SK Telecom Co. Ltd. (SKT; A-/Stable/--) completed a Korean won (KRW) 3.4 trillion acquisition of a 21% stake in Hynix. Under the deal, Hynix issued 101.85 million new shares to SKT and received KRW2.3 trillion in equity capital. In our view, the
