Despite the Slowing Global Semiconductor Industry
Moody’s announced on Sept. 1 that it raised its Samsung Electronics credit rating from Aa3 to Aa2, the third-highest level on its table.
Previously, in July, the agency kept its TSMC and Intel credit ratings at Aa3 and A1, respectively. At that time, it said that TSMC would have to keep procuring R&D funds and spend its capital substantially in order to meet existing and new customer demands.
The global semiconductor industry is slowing down this year. This is because the ongoing economic recession is adversely affecting the global semiconductor demand. South Korea’s semiconductor exports fell 7.8 percent year on year last month, the biggest decline since April 2020. According to investment banks, global semiconductor prices are unlikely to rebound before the second half of next year.
“Despite such adverse conditions, Samsung Electronics is retaining its market leading position while creating a free cash flow,” the agency said, adding, “The company’s net cash was 108 trillion won at the end of the first half, when its operating profit increased 28.6 percent year on year to 28.2185 trillion won, and its free cash flow is expected to be considerable until 2024 although its short-term profitability cannot but be affected by the global conditions.”