SK Hynix’s U.S. debut is already drawing intense investor interest, with the $28 billion American depositary receipt (ADR) offering reportedly more than seven times oversubscribed.
Demand far exceeds supply
According to a source familiar with the matter, the memory chipmaker’s ADR sale has attracted orders that dwarf the number of shares available. The anonymous source said the oversubscription reflects strong appetite for AI‑related memory chips. SK Hynix has not confirmed the exact level of demand.
The firm plans to set the price on Thursday, with trading slated to start Friday on the Nasdaq. Under the terms of the deal, ten ADRs will represent one ordinary share. A recent filing cited a price of 242,500 won per ADR, based on the July 3 closing price in Seoul, while the share price on Thursday closed at 2,186,000 won.
Strategic timing for the fundraiser
The capital raise comes as global AI infrastructure spending lifts demand for high‑bandwidth memory (HBM). SK Hynix supplies the majority of HBM used in Nvidia’s graphics processors, a position that has become increasingly valuable as AI models grow larger.
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Nvidia chief Jensen Huang recently reiterated that SK Hynix will stay as the company’s biggest memory partner, warning that shortages of advanced AI memory could persist for years because demand remains exceptionally strong. “As long as there is demand for graphic processors and AI data centers, SK Hynix is indispensable,” said Professor Yoo Hoi‑jun of KAIST.
Portfolio manager Di Zhou of Thornburg Investment Management noted that a U.S. listing could narrow the valuation gap between the Korean firm and its American rival Micron Technology. The Korean firm currently trades at about 5.5 times forward earnings, versus Micron’s roughly 6.66 multiple.
Investors have long cited corporate‑governance concerns for the “Korea discount” that often depresses valuations of South Korean companies. While the ADR program may expand the shareholder base, analysts caution that domestic share prices could still lag behind the broader market.
In the past two weeks, SK Hynix shares have slipped around 25 percent amid a cooling tech sector, yet they remain roughly 680 percent above levels a year earlier. This rise is backed by earnings that have accelerated faster than the stock price, pulling the forward‑price‑to‑earnings multiple down from about 7.9 in October to the current 5.5.
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Employees are set to receive average annual bonuses of about $574,500, highlighting the profit surge linked to AI memory demand.
The filing shows interest from several institutional investors, including Baillie Gifford Overseas, funds managed by Coatue Management, and Situational Awareness Partners, which together could purchase up to $7 billion of the ADRs.
Should the pricing meet expectations, the offering would rank as the world’s second‑largest share sale after SpaceX’s $85.7 billion IPO in May. The funds are earmarked for new semiconductor manufacturing facilities and equipment, aimed at meeting the ongoing AI‑driven demand for advanced memory solutions.
