Fitch upgrades Hynix

Fitch Ratings said it upgraded Hynix Semiconductors Inc.'s long-term foreign- and local-currency issuer default and senior unsecured ratings to BB from BB- and removed them from Rating Watch positive.

The outlook is stable.

This follows the completion of SK Telecom Co., Ltd.'s (A-/stable) acquisition of 21% of Hynix, according to the agency.

"Notwithstanding limited operational synergy with [SK Telecom], the upgrades reflect Fitch's view that Hynix will be an important asset for SKT given the chairman's strong desire to expand into manufacturing," Alvin Lim, an associate director at Fitch, said in a statement.

Hynix is now rated a notch above its standalone level, reflecting support from SK Telecom.

Fitch said it retains a conservative view on Hynix's DRAM operations given substantial price falls and resultant EBIT losses during the second half of 2011.

But the agency forecasts that the industry may gradually improve in 2012 given ongoing capacity reduction by second-tier DRAM makers, the agency said.

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