South Korean chipmaker SK Hynix will begin a US listing of American depositary receipts (ADRs) on Monday, aiming to raise roughly $28 billion, according to documents filed with regulators.
The company is selling 17.79 million new ADRs on the Nasdaq. Under the plan, ten ADRs correspond to one common share. The offering price will be announced on Monday based on the Seoul stock price, with a final price set on Thursday and trading expected to start on Friday. Company executives will conduct an investor roadshow during the week.
SK Hynix shares fell about 4% on Monday, but have climbed roughly 273% year-to-date, reflecting strong investor interest in securities tied to artificial intelligence. Share prices among memory-chip manufacturers have fluctuated in recent days as some market participants question how long the sector’s rally can last.
Proceeds from the offering will fund construction of SK Hynix’s semiconductor fabs in South Korea and purchases of manufacturing equipment, including ASML’s extreme ultraviolet (EUV) lithography machines from the Netherlands. SK Hynix is a key supplier of high-bandwidth memory chips (HBM) used in AI systems, and counts customers such as Nvidia and Google.
Analysts say a major benefit of the US ADR listing is broader access for US retail investors and smaller institutional investors. Dave Mazza, chief executive of Roundhill Investments, noted the move is more than a simple increase in liquidity because SK Hynix is one of the world’s largest companies and has been difficult for many US institutions to access.
The shares are also expected to be included in the Philadelphia semiconductor index, which could open the stock to passive funds. If completed at the targeted size, the transaction would be the second-largest share offering so far this year, after SpaceX’s record $85.7 billion listing last month.
Background: Last week South Korea announced a comprehensive industrial development strategy focused on semiconductors and artificial intelligence, including a $576 billion chip-industry investment program in which SK Hynix is a prominent participant.
This article is for informational purposes and does not constitute investment advice or a recommendation.
