South Korea chip maker SK hynix rides AI boom raising $26.5bn in huge US listing

South Korean chip maker SK hynix set pricing for its mega US listing on Friday, aiming to raise $26.5bn as it takes advantage of the AI boom in what will be one of the world’s biggest ever stock sales. The Asian semiconductor giant plans to issue the equivalent of about 18m shares on Wall Street’s tech-heavy Nasdaq index later in the day. SK hynix, a supplier of advanced memory chips to industry behemoth Nvidia, has seen profits skyrocket thanks to the global race to build artificial intelligence datacentres. Tech stocks have tumbled in recent weeks on fears of overheated valuations – SK hynix has soared more than 220% this year in Seoul – and concerns about when the enormous global AI spending will reap returns. But Friday’s Nasdaq listing has enjoyed considerable interest, and was more than seven times oversubscribed, according to US media. The amount raised did not come close to the record $75bn raised in SpaceX’s IPO last month, which made founder Elon Musk the world’s first trillionaire. But it beat out Saudi Aramco’s 2019 $25.6bn debut and the $21.8bn raised by Chinese tech firm Alibaba in its New York initial public offering. SK hynix will list through something called American depositary shares (ADS), which allow slices of foreign companies to be traded on US public markets. The company said 177.9m depositary shares, each representing one-tenth of a usual share, had been set “at an initial public offering price of $149.00 per ADS”. The offering is being led by BofA Securities, Citigroup Global Markets, Goldman Sachs (Asia) and JP Morgan Securities, SK hynix said. SK hynix shares rose 2.7% on Seoul’s Kospi index after the announcement. The company’s market capitalisation on the Kospi soared past $1tn in May. That milestone was also recently hit by domestic rival Samsung Electronics and US chip maker Micron – with AI pushing the three firms into a previously exclusive club of about a dozen $1tn companies, nearly all American. An 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 prospects. Samsung, SK hynix and Micron dominate the global market for the advanced components known as high-bandwidth memory (HBM), used in AI servers alongside other data-crunching semiconductors. As chip makers plough resources into lucrative HBM, shortages of the less flashy memory chips in consumer electronics are pushing up prices, with Apple hiking the cost of its MacBooks and iPads. Counterpoint Research analyst MS Hwang said SK hynix wants to triumph over Samsung in the memory chip market. “Along with the HBM leadership it has demonstrated until recently, the company is now planning to take the lead in terms of volume as well,” Hwang told AFP. “Funds from its US listing can support such a goal.” SK hynix said Friday it plans to use the proceeds from the offering to fund construction of the first fabrication hub at a new semiconductor cluster in Yongin near Seoul, and to build an advanced packaging facility in the central city of Cheongju, among other projects. The company, along with Samsung, is also involved in a massive public-private investment of 800tn won to build a new chip hub in southwest South Korea. The AI chip boom has fuelled debate about what South Korea should do with the tax windfall, as well as workers’ demands over pay packages – with Samsung averting a strike by agreeing a deal on bonuses.