[Edaily Marketin Reporter LEE GEON-EOM ] SK hynix(000660)is broadening its bond investment portfolio by purchasing not only specialized credit finance company bonds but also asset-backed commercial paper (ABCP) backed by time deposits. After resuming bond investments—which had been suspended entirely last August—through a discretionary management arrangement and completing a 40 trillion won share buyback, the company appears to be accelerating its efforts to expand its investment channels.

Market observers are increasingly expecting SK hynix to diversify its investment portfolio, focusing on short-term instruments that offer stability comparable to bank deposits. Given the company’s upcoming large-scale funding needs—such as capital expenditures and shareholder returns—it has no choice but to prioritize instruments that can be liquidated at any time.

According to the financial investment industry on the 3rd, SK hynix is reported to have recently purchased deposit-backed ABCP. Following its earlier move to entrust a total of 3 trillion won in bond investment funds to six asset management firms—which then used the funds to purchase high-quality financial institution bonds with credit ratings of AA0 or higher—the company has now broadened its investment scope to include short-term products with short maturities.

Deposit-backed ABCP refers to short-term commercial paper issued by a special purpose company (SPC) established by a securities firm, using time deposits held at commercial banks as the underlying asset. Since it is collateralized by bank deposits, it carries low credit risk and generally has short maturities of within a few months. Unlike time deposits, it can be bought and sold on the secondary market, allowing the company to recover funds without the burden of early withdrawal, which is considered a key advantage.

Some interpret this investment as an extension of the fund’s strategy, which began last August with the shift of funds into bank deposits. This is because it maintains the same level of stability as deposits while allowing for greater flexibility in recovering funds.

At the time, market observers speculated that SK hynix’s suspension of bond purchases was not unrelated to securing funds for shareholder returns. SK hynix, which had been purchasing more than 1 trillion won worth of bonds daily in June and July, withdrew even the volume scheduled for issuance the very next day and shifted the funds to commercial bank deposits, from which it could withdraw funds at any time. In fact, on August 19, SK hynix resolved to repurchase and cancel 40 trillion won worth of its own shares, and on the 21st of last month, it completed the buyback about a month ahead of the original schedule. With the burden of large-scale cash outflows alleviated, the company is expected to accelerate its bond investments once again.

Its investment capacity has also increased significantly. SK hynix posted record-breaking third-quarter results with revenue of 104.6155 trillion won and operating profit of 83.3338 trillion won. As of the end of September, cash and cash equivalents stood at 114.5 trillion won, an increase of 26.5 trillion won from the end of the previous quarter. With debt reduced to 15.8 trillion won, net cash expanded to 98.7 trillion won.

This coincided with the strengthening of the company’s capital management organization. SK hynix posted a job opening in July for experienced asset management professionals in its capital team and completed the hiring process last month. The selected candidates will be responsible for formulating asset allocation strategies based on macroeconomic analysis; managing performance of direct and outsourced investments in fixed-term deposits, government and public bonds, special-purpose bonds, corporate bonds, commercial paper (CP), and electronic short-term bonds (ESTBs); and conducting risk hedging operations. It is reported that even this small-scale recruitment—for just one experienced professional—attracted a flood of applicants from the securities industry in Yeouido and pension fund managers, resulting in a competition ratio in the triple digits.

However, some observers note that the nature of these funds as “idle cash” has not changed. The increase in cash for the third quarter reflects approximately 40 trillion won raised through the listing of American Depositary Receipts (ADRs) in July. These funds are earmarked for capital expenditures, such as the construction of the Yongin semiconductor cluster and the Cheongju packaging plant. In addition, SK hynix announced a 60 trillion won additional shareholder return plan on the 28th of last month, alongside its third-quarter earnings report. The estimated total shareholder returns for this year, including the share buyback announced last August, amount to approximately 100 trillion won. Analysts note that the company has no choice but to focus on products with shorter maturities and higher liquidity rather than long-term instruments.

A financial investment industry official explained, “It’s fine as long as SK hynix remains a player in the market, like SoftBank or Berkshire Hathaway’s insurance companies,” but added, “I understand that SK hynix purchased the bonds with maturities aligned with its factory construction schedule.” The official added, “If the cash generated by the AI boom has been parked for capital expenditures (CAPEX), there will inevitably be concerns about who will step in next when it’s time to exit.”