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South Korea chip maker SK hynix rides AI boom raising $26.5bn in huge US listing
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South Korean chip maker SK hynix set the pricing for its mega US listing on Friday, aiming to raise $26.5 billion in one of the world's largest stock sales. The company, which supplies advanced memory chips to Nvidia, plans to issue approximately 18 million American depositary shares on the Nasdaq index. This move capitalizes on the artificial intelligence boom that has driven SK hynix's profits and market value to record highs.
The listing comes amid a turbulent period for tech stocks, which have tumbled on fears of overheated valuations and concerns about when massive AI spending will yield returns. SK hynix shares have surged more than 220% in Seoul this year, propelling its market capitalization past $1 trillion in May. Despite market jitters, the Nasdaq offering was more than seven times oversubscribed, indicating strong investor appetite.
The $26.5 billion raised surpasses the $25.6 billion from Saudi Aramco's 2019 debut and the $21.8 billion from Alibaba's New York IPO, though it falls short of SpaceX's record $75 billion listing last month. SK hynix will trade through American depositary shares, with each ADS representing one-tenth of a common share, priced at $149. The offering is led by major banks including BofA Securities, Citigroup, Goldman Sachs, and JPMorgan.
SK hynix, along with Samsung Electronics and Micron Technology, dominates the global market for high-bandwidth memory chips essential for AI servers. The AI boom has not only boosted these companies but also led to shortages of less advanced memory chips in consumer electronics, driving up prices. Apple, for instance, has raised costs for MacBooks and iPads due to higher component prices.
Analysts view the US listing as a strategic move to outpace rival Samsung in the memory chip market. MS Hwang of Counterpoint Research noted that SK hynix aims to lead not only in HBM technology but also in production volume, with the funds supporting its expansion plans. The company intends to use proceeds to build a new fabrication hub in Yongin and an advanced packaging facility in Cheongju.
Looking ahead, SK hynix is also part of a massive public-private investment of 800 trillion won to develop a chip hub in southwest South Korea. The AI chip surge has sparked debates in South Korea about managing tax windfalls and worker compensation, with Samsung recently averting a strike by agreeing on bonuses. SK hynix's successful listing underscores the pivotal role of AI in reshaping the global semiconductor landscape.
