South Korean chipmaker SK Hynix is set to raise approximately $26.5 billion through its American Depositary Receipt (ADR) listing on the Nasdaq, with pricing at $149 per ADR. The company opted for this U.S. share sale to finance new factories and equipment, meeting the surging demand for AI chips. This move is also expected to help narrow the valuation gap with its U.S. rival, Micron Technology, which currently benefits from direct access to a larger pool of investors.
The offering has seen immense interest, with demand exceeding available shares by more than seven times. This reflects strong investor appetite for a pivotal company in the AI supply chain, particularly given SK Hynix's leadership in high-bandwidth memory (HBM) chips, crucial for advanced AI processors. Baillie Gifford Overseas, Coatue Management, and Situational Awareness Partners have indicated interest in purchasing up to a combined $7 billion of the ADRs. Nvidia CEO Jensen Huang has also stated that SK Hynix would remain its largest partner and that the current memory chip shortage is expected to persist for several years.
The ADRs will begin trading on Nasdaq on July 10 under the ticker "SKHY," with Bank of America, Citigroup, Goldman Sachs, and J.P. Morgan serving as underwriters. The primary listing for SK Hynix will remain in Seoul. South Korean officials are preparing for currency flows related to the $29 billion ADR listing, which is expected to settle on July 14, causing funds to flow into the South Korean market. Analysts anticipate that the ADRs might trade at a premium to the Korean-listed shares, especially if there are restrictions on conversion between the two securities and if the ADRs improve accessibility for global portfolio managers who do not typically invest in Korean stocks.
