Fitch Ratings raised Kioxia Holdings' (TYO:285A) issuer default rating to BBB- from BB+, with a stable outlook, according to a Monday release.

The rating action considers the boost in the Japanese company's financial profile on a mid-cycle basis given improved operating performance, solid cash generation, and reduced funding costs after refinancing its debt, Fitch said.

The company has shown strong EBITDA profitability, resulting to positive free cash flow generation and EBITDA leverage kept at under 0.5x, the rating agency said.

The company now has improved capacity to weather volatility in the NAND memory semiconductor cycle, Fitch said.

The rating reflects the company's major position in the NAND industry, driven by advanced technological capability, resilient cost competitiveness, and high barriers to entry.

Notable shifts in the company's market share, profit margin, EBITDA leverage, and cash flow could prompt future rating actions.