South Korea chip maker SK hynix rides AI boom raising $26.5bn in huge US listing | South Korea
South Korean chipmaker SK hynix set the price for its mega US listing on Friday, aiming to raise $26.5 billion by capitalizing on the AI boom in what would be one of the world’s biggest stock sales ever.
The Asian semiconductor giant plans to issue shares equivalent to about 18 million shares on Wall Street’s tech-heavy Nasdaq index later in the day.
SK hynix, a supplier of advanced memory chips to industry giant Nvidia, has seen profits soar thanks to the global race to build AI data centres.
Technology stocks have tumbled in recent weeks on fears that valuations will overheat (SK hynix is up more than 220% in Seoul this year) and concerns about when massive global AI spending will see returns.
But Friday’s Nasdaq listing attracted great interest and was more than seven times oversubscribed, according to US media.
The amount raised did not come close to the record $75 billion raised in SpaceX’s IPO last month, which made founder Elon Musk the world’s first trillionaire.
But it surpassed Saudi Aramco’s $25.6 billion debut in 2019 and the $21.8 billion raised by Chinese tech firm Alibaba in its initial public offering in New York.
SK hynix will list through something called American depository shares (ADS), which allow parts of foreign companies to be listed on US public markets.
The company said 177.9 million custodial shares, each representing one-tenth of the ordinary share, were designated “at an initial public offering price of $149.00 per ADS.”
SK hynix said the offering was led by BofA Securities, Citigroup Global Markets, Goldman Sachs (Asia) and JP Morgan Securities.
SK hynix shares rose 2.7% on Seoul’s Kospi index following the announcement. The company’s market value on Kospi exceeded $1 trillion in May.
This milestone was also recently achieved by local rival Samsung Electronics and US chipmaker Micron; AI has pushed these three firms into a previously exclusive club of a dozen companies valued at nearly $1 trillion, almost all of them American.
The image of an SK hynix jacket went viral in South Korea this year as a symbol of wealth and success, with parody posts depicting it as a “golden ticket” to luxury boutiques or better dating opportunities.
Samsung, SK hynix and Micron dominate the global market for advanced components known as high-bandwidth memory (HBM) used in AI servers, among other data-processing semiconductors.
A shortage of less flashy memory chips in consumer electronics is driving up prices as chipmakers pour resources into lucrative HBM; Apple is increasing the prices of its MacBooks and iPads.
Counterpoint Research analyst MS Hwang said SK hynix wants to triumph against Samsung in the memory chip market.
“The company plans to take the lead in terms of volume, in addition to the HBM leadership it has shown until recently,” Hwang told AFP.
“US-listed funds could support such a goal.”
SK hynix said on Friday that it plans to use proceeds from the offering to finance the construction of the first manufacturing center in a new semiconductor cluster in Yongin, near Seoul, and to build an advanced packaging plant in the central city of Cheongju, among other projects.
The company is also participating in a massive 800 trillion won public-private investment with Samsung to build a new chip hub in southwestern South Korea.
The surge in AI chips has fueled debate over what South Korea should do about unexpected taxes, as well as workers’ demands for pay packets; Samsung averted the strike by making an agreement on bonuses.
