SK Hynix debuts on Nasdaq. Will that bridge its ‘Korea discount’? 

As global chip giant SK Hynix makes its debut on Nasdaq on Friday, the listing will test whether the stock can recover from the long-running “Korean discount.”

The “Korean discount” refers to the tendency for South Korean companies to trade at lower valuations compared to their global counterparts due to concerns about corporate governance and opaque holding structures.

Listing on Nasdaq through American depositary receipts, or ADRs, would give SK Hynix direct access to the world’s deepest pool of capital, a move experts have debated could narrow that discount.

LSEG data showed SK Hynix traded at just 4.8 times trailing 12-month forward earnings; compared to the industry average of 29.84 times and the US competitor Micron Technology6.6x despite its lead in the rapidly growing high-bandwidth memory, or HBM, market.

“We see some room where this gap could narrow with the ADR listing, but we don’t expect the Korean discount to close completely,” Rolf Bulk, head of semiconductors and infrastructure at Futurum Group, told CNBC.

Zavier Wong, market analyst at multi-asset trading platform eToro, said the difference in price-to-earnings ratios between Micron and SK Hynix is ​​mainly due to “access” and “familiarity” as SK Hynix’s limited accessibility to US funds has kept its valuation low for years despite its stronger position in AI memory.

“Increasing Hynix’s shares is not the same as decreasing discounts, so while its price has increased, the gap to Micron has not decreased,” Wong said.

LSEG showed Micron’s shares are up nearly 250% this year, while SK Hynix is ​​up 240%.

Peter Kim, global investment strategist at KB Financial Group, reiterated that the listing should also improve access for overseas investors who have historically faced obstacles when purchasing Korean stocks.

“Additional access could help global investors trade Hynix shares, which currently trade at a discount to KOSPI, Micron and Samsung,” he said. “A Nasdaq listing would be a key factor in narrowing this discount, as the listing requirements required to list would alleviate some concerns among U.S. investors.”

Nasdaq listing rules require companies to meet financial and liquidity thresholds, including minimum market capitalization, free float, number of shareholders and share price requirements. Listed companies are also subject to corporate governance standards covering areas such as audit committees, director independence and shareholder voting rights.

ADRs are priced From $149 each and the company will raise about $26.5 billion if the IPO is oversubscribed, but analysts say access to U.S. investors could ultimately be more valuable than the capital itself.

SK Hynix’s IPO will partially support growing capex, estimated at 50 trillion won to 70 trillion won annually over the next two years, but the majority will be financed through internal cash flow, said Ji Cheong, deputy director of S&P Global Ratings.

“The company is expected to generate over 200 trillion won in annual operating cash flow over the next two years,” Cheong added.

Still, Wong hopes the listing will help strengthen SK Hynix’s ability to finance expansion and could pave the way for more U.S. initiatives, including buybacks, greater investor participation and broader expansion into the American market.

The listing also comes as investors weigh whether SK Hynix can maintain its leadership in the fast-growing HBM market supporting AI accelerators.

Rayliant chief portfolio manager Philip Wool said SK Hynix had become a “victim of its own success” as explosive demand for HBM had far exceeded its ability to supply the market.

This has created an opportunity for Samsung Electronics and Micron to secure their own supply deals with hyperscalers looking to diversify their AI chip supply chains while accelerating investment in rival products.

Futurum Group’s Bulk expects SK Hynix to remain the top HBM supplier, but its market share is expected to fall from roughly 57% last year to around 50% this year and then drop to the low 40% range over time as Samsung gains strength and Micron solidifies itself as the third largest player.

The bigger challenge is capacity, not market share. “The real debate is less about sharing and more about who can bring the capacity online to meet it,” Bulk said, adding that even announced factory expansions have fallen short of meeting the demand expected by the end of the decade.