The agency said it upgraded the unsecured long-term debt rating of Hitachi Ltd. to A1 from A2 as the company "should further stabilize and improve its profitability while reserving its sound balance sheet structure."

Hitachi incurred heavy losses in the two years to March 2002 as the world semiconductor market slumped but it has since cut its chip-making operations and focused on hardware that is globally competitive, Moody's said.

Moody's also raised its ratings to A2 from Baa1 for Mitsubishi Electric Corp., to A3 from Baa1 for Toshiba Corp., and to Baa1 from Baa2 for both Fujitsu Ltd. and NEC Corp.

Mitsubishi Electric had spun off its dynamic random access memorybusiness into a joint-venture with Hitachi and restructured its mobile phone operations, Moody's said.

Mitsubishi's profitability and cash flow had "significantly stabilized thanks to its refocusing on its traditionally strong markets while at the same time reducing resources allocated to semiconductors," it said.

Toshiba had also withdrawn from DRAM operations and refocused on application-specific semiconductors by collaborating with customers from the development stage, Moody's said.

NEC and Fujitsu were making stable profits from IT software and solutions businesses, it said.

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