AI Boom Fuels SK Hynix's Planned USD 29.4 Billion Nasdaq Listing
- tech360.tv
- 2 hours ago
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SK Hynix plans to raise up to USD 29.4 billion through a United States stock market listing. The South Korean memory chipmaker aims to capitalise on strong investor appetite for artificial intelligence (AI) stocks.
This potential listing would be among the biggest globally. If completed at the top end, it would be the second-largest share sale after SpaceX's record USD 85.7 billion initial public offering, surpassing Saudi Aramco’s USD 25.6 billion IPO in 2019 and Alibaba’s similar-sized offering in 2014.
The planned listing reflects robust global demand for AI-linked equities, even as volatility increases across US technology and semiconductor markets. It follows other record-breaking equity issuance in the sector, including SpaceX, and precedes expected IPOs later this year from AI-focused organisations like Anthropic and OpenAI.
The world's largest technology companies are tapping debt markets and raising equity to fund a costly expansion of AI infrastructure. Google-parent Alphabet, for instance, indicated earlier this month that it was looking to raise USD 80 billion in equity offerings.
Senior Analyst Ryu Young-ho at NH Investment & Securities highlighted the attractive benefit for investors. He stated, “The most attractive benefit for investors is that SK Hynix will trade on Nasdaq alongside rival Micron, giving the company an opportunity to be re-rated in the U.S. market.” Ryu added that this could reflect in its Korea-listed shares as investors increasingly link the two valuations.
SK Hynix, a memory chip maker valued at about USD 1.2 trillion, has significantly benefited from the AI boom. Its shares have quadrupled this year, outperforming rivals Samsung Electronics and US-based Micron.
The company is a key supplier of high-bandwidth memory chips used in AI systems by customers such as Nvidia and Google. It recently overtook Samsung to become South Korea's most valuable company.
CLSA Senior Analyst Sanjeev Rana noted that expectations for a US listing have already helped drive the stock’s rally. This is alongside strong demand for high-end memory utilised in AI data centres. Rana suggested that if SK Hynix achieves a valuation multiple similar to Micron, its local shares would also need to reflect that.
Proceeds from the listing of American Depositary Receipts (ADRs) will be used to construct chip factories in South Korea. Funds will also go towards purchasing chipmaking equipment, such as an extreme ultraviolet scanner from Dutch equipment maker ASML, shares of which rose 1.1%.
SK Hynix plans to issue up to 17.79 million new shares, valued at USD 29.43 billion, in the ADR listing on Nasdaq. Ten ADRs will represent one common share.
Pricing for the ADRs will be finalised after bookbuilding. The initial range for the common share is based on a closing price of USD 1,651.69, which implies an initial range of approximately USD 165.17 per American Depositary Receipt (ADR), as ten ADRs will represent one common share.
Singapore-based Portfolio Manager Gary Tan at Allspring Global Investments remarked that the ADR listing should not materially change his view on SK Hynix or the memory sector. Tan stated, “The headline capital raise appears large but implies only limited dilution and remains modest relative to its mid-term capex plans.”
BofA Securities, Citigroup Global Markets, Goldman Sachs, and JP Morgan Securities are managing the offering. The planned listing amount of USD 29.4 billion represents a sharp increase from an initial plan in March, which a source indicated could raise as much as USD 14 billion, a rise that was significantly helped by the company's blistering share price rally.
SK Hynix plans a U.S. stock market listing to raise up to USD 29.4 billion.
The listing aims to capitalise on strong investor demand for AI stocks and fund AI infrastructure expansion.
Proceeds will be used to build chip factories in South Korea and purchase chipmaking equipment.
Source: Reuters
