SK Hynix, the South Korean memory-chip giant, is set to make a historic debut on the Nasdaq with a massive $28 billion American depositary receipt (ADR) offering, underscoring the insatiable investor appetite for AI-related supply chain exposure. According to a Reuters source, the deal is more than seven times oversubscribed, positioning it among the largest equity offerings on record.
The company is offering 177.9 million ADRs, each representing one-tenth of a common share, under the ticker symbol SKHY. Trading is expected to begin on Friday, July 10, following final pricing in New York on Thursday. MarketWatch estimates the offering could raise approximately $25.7 billion if lead banks match Thursday's Seoul closing price, trailing only SpaceX in the equity deal rankings.
The timing is strategic. SK Hynix is a dominant player in high-bandwidth memory (HBM), a critical component for AI data-center processors. "As long as there is demand for graphic processors and AI data centers, SK Hynix is indispensable," said Yoo Hoi-jun, an electrical engineering professor at KAIST. The company's leadership in HBM is reflected in its 56.4% share of the global HBM market in the first quarter, according to Yonhap and IDC data.
Proceeds from the IPO will be used to expand production capacity, including investments in new chip plants in South Korea and advanced equipment like ASML's extreme ultraviolet lithography scanners. SK Hynix plans to issue up to 17.79 million new common shares as part of the listing, as previously reported by Reuters.
The listing also aims to address the valuation gap with its main U.S. rival, Micron Technology. While SK Hynix leads in AI memory, Micron trades at 6.66 times forward earnings compared to SK Hynix's 5.5 times. "Listing on Nasdaq next to Micron gives SK Hynix an opportunity to be re-rated in the U.S. market," said Ryu Young-ho, senior analyst at NH Investment & Securities.
However, risks remain. The stock has declined about 25% over the past two weeks, though it has surged roughly 680% over the last 12 months. The final pricing could be impacted if the recent slide forces a discount. Additionally, the so-called "Korea discount" stemming from governance concerns may persist. SK Hynix also disclosed a U.S. antitrust class action over conventional DRAM in its updated filing.
Wall Street banks stand to benefit significantly. The Financial Times reports that lead underwriters, including Bank of America, Citi, Goldman Sachs, and JPMorgan, could earn over $140 million in fees, based on a 0.5% fee plus a potential bonus.
The listing is expected to close by mid-July, with proceeds converted into won, potentially impacting local currency markets. For investors, the deal offers a direct way to gain exposure to the AI memory boom through a U.S.-listed security.
