SK Hynix plans to raise $29 billion via Nasdaq listing

Source Credit : Portfolio Prints

South Korea's SK Hynix said on Wednesday it plans to raise up to $29.4 billion through a U.S. stock market listing, potentially making it one of the largest global share offerings ever, as the Nvidia supplier seeks to capitalise on strong investor demand for artificial intelligence-related stocks.

If priced at the top end of the range, the deal would become the world's second-largest share sale, behind SpaceX's record $85.7 billion initial public offering earlier this month. It would surpass Saudi Aramco's $25.6 billion IPO in 2019 and rival Alibaba's similarly sized 2014 offering.

The proposed listing underscores the continued global appetite for AI-linked investments despite increasing volatility across U.S. technology and semiconductor markets.

It comes just weeks after major equity issuances within the sector, including SpaceX, and ahead of anticipated IPOs from AI-focused companies such as Anthropic and OpenAI later this year.

Technology giants are increasingly turning to debt and equity markets to finance the massive costs associated with expanding AI infrastructure. Earlier this month, Google parent Alphabet said it was seeking to raise $80 billion through equity offerings.

"The most attractive benefit for investors is that SK Hynix will trade on Nasdaq alongside rival Micron, giving the company an opportunity to be re-rated in the U.S. market," said Ryu Young-ho, senior analyst at NH Investment & Securities.

"That could also be reflected in its Korea-listed shares as investors increasingly link the two valuations."



Now valued at approximately $1.2 trillion, SK Hynix has emerged as one of the biggest beneficiaries of the AI boom. Its shares have quadrupled this year, significantly outperforming rivals Samsung Electronics and U.S.-based Micron.

The company is a key supplier of high-bandwidth memory (HBM) chips used in AI systems by customers including Nvidia and Google. This week, it overtook Samsung to become South Korea's most valuable company.

CLSA senior analyst Sanjeev Rana said expectations surrounding a U.S. listing had already fuelled the stock's rally, alongside robust demand for premium memory chips used in AI data centres.

"If they can secure a valuation multiple similar to Micron, then local shares should eventually reflect that as well," Rana said. "I wouldn't be surprised if the rally continues."

The sharp rise in SK Hynix's share price marks a dramatic turnaround for a company that nearly collapsed under debt two decades ago. It has also significantly increased the size of the planned offering from earlier expectations. A source told Reuters in March that the company initially expected to raise as much as $14 billion.

SK Hynix said proceeds from the American Depositary Receipt (ADR) listing will be used to build new chip fabrication plants in South Korea and purchase advanced manufacturing equipment, including extreme ultraviolet (EUV) lithography machines from Dutch chip equipment maker ASML.

The world's second-largest memory chipmaker plans to issue up to 17.79 million new shares worth 45.45 trillion won ($29.43 billion) through the Nasdaq ADR offering.

Ten ADRs will represent one common share. Final pricing will be determined after bookbuilding, with the initial range based on Tuesday's closing share price of 2.555 million won ($1,651.69).

"The ADR listing should not materially change our view on SK Hynix or the memory sector," said Gary Tan, a Singapore-based portfolio manager at Allspring Global Investments.

"The headline capital raise appears large, but dilution remains limited and the amount is modest relative to the company's medium-term capital expenditure plans."

BofA Securities, Citigroup Global Markets, Goldman Sachs and JP Morgan Securities are managing the offering, SK Hynix said.