SK Hynix Sets a $29 Billion Nasdaq Listing, Poised to Be the Largest ADR Offering Ever, With All Proceeds Funding New Chip Fabs and EUV Tools
SK Hynix will list ADRs on the Nasdaq on July 10 to raise up to $29 billion, potentially the largest ADR offering on record, with all proceeds funding new chip fabs, advanced packaging, and EUV scanners.
Overview
SK Hynix, the world’s second-largest memory-chip maker, is preparing to sell American depositary receipts on the Nasdaq to raise up to $29 billion, in a listing scheduled to begin trading on July 10, according to Reuters. At the top of its price range, the deal would rank as the largest ADR offering on record, as reported by TNW. Unusually for a share sale of this size, the company has earmarked all of the proceeds for semiconductor capacity rather than for shareholders or debt reduction.
What We Know
SK Hynix plans to raise up to 45.45 trillion won, about $29.4 billion, by issuing up to 17.79 million new shares, with ten ADRs representing one common share, according to Reuters. TNW reports the same 45.45 trillion won total and 17.79 million-share figure. Bookbuilding began on July 6, final pricing is set for July 9, and the ADRs are expected to debut on the Nasdaq on July 10, per Reuters. The receipts will trade under the ticker SKHY, according to Benzinga.
If priced at the top of its range, the offering would be the largest ADR offering on record, surpassing Alibaba’s 2014 New York debut of $21.8 billion, according to TNW. Reuters notes the deal would also surpass Saudi Aramco’s $25.6 billion 2019 IPO. Fortune described it as the biggest-ever first-time share sale by a foreign company.
The capital is destined entirely for chipmaking. Reuters reports the proceeds will fund chip factories in South Korea and the purchase of chipmaking equipment such as an extreme ultraviolet (EUV) scanner made by Dutch equipment maker ASML. According to TNW, the money is allocated to a chip fabrication plant in Yongin, an advanced-packaging facility in Cheongju, and EUV scanners, with none of it going to shareholders or debt. The offering is being underwritten by BofA Securities, Citigroup Global Markets, Goldman Sachs, and JP Morgan Securities, TNW reports.
Why Now
SK Hynix has become the dominant supplier of the high-bandwidth memory that feeds AI accelerators, supplying roughly 60 to 70 percent of the HBM4 volume for Nvidia’s Vera Rubin platform, according to TNW. That position has driven an extraordinary run: the company’s Korea-listed shares have gained about 700 percent over the past 12 months, according to Fortune, and are up more than 250 percent this year, per Benzinga. Its market capitalization now stands at approximately $1.2 trillion, according to Reuters; TNW reports it recently overtook Samsung Electronics to become South Korea’s most valuable listed company.
The Nasdaq listing is designed to give US investors direct access to that memory cycle. Benzinga frames the debut as a second direct way for American investors to play the AI memory boom alongside Micron. Historically, SK Hynix has traded at a discount to its US rival: Fortune reports it currently trades at about 6.2 times estimated forward earnings versus roughly 7 times for Micron, while Benzinga notes Micron is up 209.29 percent year-to-date.
Reaction
The listing arrives amid heavy enthusiasm for memory stocks. “We are in a time of extreme enthusiasm about chip stocks,” Daniel Morgan of Synovus Trust Co. told Fortune. Shay Boloor, chief market strategist at Futurum Equities, pointed to a projected 91 percent DRAM gross margin in the second quarter as a sign of how extreme the memory cycle has become, according to Benzinga.
Not everyone is convinced the valuations are sustainable. “Investors run the risk of stepping into something that’s potentially a speculative bubble,” Ed O’Gorman of River Wealth Advisors told Fortune.
What We Don’t Know
The final price and exact proceeds will not be fixed until pricing on July 9, according to Reuters, so the record-ADR designation depends on where the offering prices within its range. The cited coverage does not break down how much of the proceeds is allocated to each of the Yongin fab, the Cheongju advanced-packaging plant, and the EUV equipment orders.