Global investors have placed orders for more than seven times the shares available in SK Hynix's upcoming American depositary receipt (ADR) offering, according to reports from Bloomberg and Reuters. The strong demand underscores the market's appetite for exposure to the AI memory chip leader.
The offering, equivalent to 17.79 million common shares, has attracted interest from around 1,000 institutional investors during the company's management roadshow earlier this week. Bloomberg reported that global long-only funds and technology-focused investors have been particularly active, with orders ranging from $200 million to over $1 billion from US-based investors.
SK Hynix is set to price the ADRs on Thursday, with trading on the Nasdaq expected to begin on July 10. Based on the company's closing share price in Seoul last Friday, the offering is valued at approximately $28 billion, putting it on track to become the largest-ever US listing by a foreign company. The current target, however, is lower than the company's earlier fundraising goal of 45.453 trillion won.
Each ADR represents one-tenth of a common share, with the offering accounting for roughly 2.5% of SK Hynix's market capitalisation. The company has disclosed that Baillie Gifford Overseas Limited, investment funds managed by Coatue Management, and Situational Awareness Partners have each separately indicated interest in purchasing up to a combined $7 billion of its US ADRs.
AI-Driven Memory Demand Supports Long-Term Outlook
SK Hynix has emerged as one of the biggest beneficiaries of the global AI infrastructure boom. Its market value has more than tripled this year as demand for high-bandwidth memory (HBM) chips used in AI servers surged. The company has become Nvidia's leading supplier of HBM chips after spending more than a decade investing in the technology, positioning it at the centre of the AI hardware supply chain.
Although semiconductor stocks globally have lost some momentum in recent weeks amid concerns over AI spending and broader market volatility, SK Hynix and rival Samsung Electronics continue to sit on substantial long-term gains thanks to robust demand from AI data centres. SK Hynix shares have declined around 25% over the past two weeks following a sharp rally, but the stock remains up about 680% over the past year.
The company said proceeds from the ADR offering will be used to expand semiconductor manufacturing facilities in South Korea and purchase advanced chipmaking equipment, including ASML's extreme ultraviolet (EUV) lithography systems. The investments are intended to boost production capacity as demand for AI memory chips continues to outpace supply.
US Listing Could Unlock Higher Valuations
Market analysts believe the Nasdaq listing could catalyze a valuation re-rating by increasing SK Hynix's visibility among global investors. Meritz Securities analyst Kim Sun-woo said in a recent research note that the ADR listing would help SK Hynix narrow its valuation gap with US-based rival Micron Technology. Kim added that the listing could also pave the way for SK Hynix to be included in the Philadelphia Semiconductor Index, a benchmark closely tracked by global exchange-traded funds and passive investment products. Inclusion in the index could generate additional demand for the stock through passive fund inflows while improving its standing among international investors.
Meritz Securities also expects SK Hynix to continue posting strong earnings, supported by resilient demand for AI memory chips and tight industry supply, even as overall production gradually increases through the year. HSBC has also turned more optimistic on the stock, raising its valuation by applying a 20% premium to its previous price-to-book multiple of 2.8 times, resulting in a revised multiple of 3.4 times. The bank said the higher valuation reflected "more proactive shareholder-friendly initiatives and improved accessibility to global investors."
For context on the broader AI memory landscape, see our analysis on SK Hynix ADR Listing: A Stronger AI Memory Play Than Micron or SanDisk. Additionally, the recent performance of Samsung and SK Hynix Lead Asian Tech Rebound as Oil Surge Pressures Bonds highlights the sector's resilience. For a broader view on AI-driven demand, see Penguin Solutions Surges 18% on Record Revenue, AI Demand, and Nvidia Partnership.
This article is for informational purposes only and does not constitute financial advice.
