South Korean chipmaker SK Hynix has initiated a U.S. share sale, aiming to raise 43 trillion won ($28.07 billion). This move is largely driven by the global surge in artificial intelligence and represents one of the largest new share sales globally. The company indicated interest for up to $7 billion from major investors, including Baillie Gifford Overseas, investment funds managed by Coatue Management, and Situational Awareness Partners, who plan to buy American Depositary Receipts (ADRs).
SK Hynix plans to sell 17.79 million new shares through ADRs on the Nasdaq, with 10 ADRs representing one common share. The reference price, based on SK Hynix's July 3 closing price in Seoul, was 242,500 won per ADR. The final price for the New York listing is expected to be set on Thursday, with trading commencing on Friday. The proceeds from the listing will be used for constructing chip factories in South Korea and acquiring critical chipmaking equipment, such as extreme ultraviolet scanners from Dutch manufacturer ASML.
Analysts and investors view this listing as more than just a liquidity event. Dave Mazza, CEO of Roundhill Investments, highlighted that the listing provides U.S. institutions easier access to SK Hynix, a crucial player in the DRAM market. Steve Sosnick of Interactive Brokers believes this move will particularly benefit individuals and smaller institutions by removing an "accessibility discount." HSBC previously raised its valuation of SK Hynix due to improved accessibility and shareholder-friendly initiatives. The listing is expected to broaden SK Hynix's investor base and potentially close the valuation gap with its U.S. competitor, Micron. The company also anticipates joining the chip-heavy Philadelphia SE semiconductor index, which could attract further passive investments.
SK Hynix is a leading supplier of high-bandwidth memory (HBM) chips, essential components for AI systems used by companies like Nvidia and Alphabet's Google. The company's U.S. listing is timed during what some, like Di Zhou of Thornburg Investment Management, describe as a "memory super cycle," with all major suppliers benefiting from AI-driven demand. This share sale is set to be the second-largest after SpaceX's $85.7 billion IPO last month, surpassing significant IPOs from Saudi Aramco and Alibaba.
