South Korean chipmaker SK Hynix raised $26.5 billion in its New York share offering, making it the largest-ever listing by a foreign firm in the United States. The company sold 177.9 million American depositary shares at $149 each, with shares surging as much as 17% on Friday during their first day of trading on the Nasdaq.
The strong performance is attributed to the booming demand for AI chips, a sector where SK Hynix is a leading memory chip maker and a key supplier to AI chip giant Nvidia. Its market value in South Korea exceeded $1 trillion in May, and its share price in its home country has more than tripled this year, helping to boost the Kospi index by over 70%.
Demand for SK Hynix's offering was reportedly over seven times the number of available shares, allowing the company to price its shares at a 2.9% premium compared to its current stock price in Seoul. Each American depositary share is equivalent to one-tenth of a Seoul-traded common share. This listing provides US investors with a more accessible way to invest in SK Hynix without having to trade on an overseas exchange.
The funds raised from the US listing will be used to finance the construction of new chipmaking facilities and purchase advanced equipment, with plans to build these plants in Korea to develop high-end chips. While a Nasdaq listing carries risks, such as potential shifts in investment away from South Korea's stock market, it is expected to narrow the valuation gap with rivals like Micron Technology Inc. and make SK Hynix a more global company.
This $26.5 billion offering ranks as the second-biggest share sale in history, surpassed only by SpaceX's $85.7 billion listing in June. It highlights continued investor enthusiasm for AI stocks, with analysts like Holger Mueller of Constellation Research noting SK Hynix's stable position, innovation lead, strong relationship with Nvidia, and production scale as attractive propositions for investors.
