SK Hynix ADRs jump on Nasdaq debut, tapping AI memory demand
SK Hynix priced its American depositary shares above its Seoul trading level to fund factory expansion, highlighting the valuation premium US markets assign to artificial intelligence infrastructure suppliers.
SK Hynix opened its Nasdaq trading at $170 per American depositary receipt after pricing the offering at $149. The deal marks the second-largest US share sale behind SpaceX's recent listing and was more than seven times oversubscribed.
The offer price represented a 2.7% premium to the chipmaker's three-day average share price in Seoul. Giuseppe Sette, co-founder of Reflexivity, noted the deliberate strategic pricing. "This is the purest large-cap way for U.S. investors to own the AI-memory theme, and Hynix deliberately picked Nasdaq to tap that demand and the higher valuations U.S. chip names command versus Seoul," he said.
The listing is a direct attempt to close a persistent valuation gap with its US rival, Micron. While both stocks have surged over the past year—SK Hynix up 630% and Micron up 711%—the Korean company trades at roughly 5.8 times forward earnings compared to Micron's 7 times, according to LSEG data.
Capital raised will fund new factories as the company expands its footprint outside South Korea. SK Group Chairman Chey Tae-won told Bloomberg TV the company aims to develop 5 gigawatts of AI data center capacity internationally and is open to further US investments. He added that the firm could offer memory-as-a-service to alleviate AI-related processing bottlenecks.
SK Hynix dominates the market for high-bandwidth memory chips, the critical components in AI-focused processors built by Nvidia and AMD. However, the debut arrives as the broader semiconductor trade shows signs of fatigue, with the stock falling a quarter from its record high two weeks ago.
Thomas Hayes, chairman at Great Hill Capital, warned that the sector is overheated. "Global semiconductors is the most crowded trade in the world right now," he said. "The bankers and the issuer, in this case SK Hynix, are meeting demand where it is. They're seeing excessive valuations, and they want to take advantage of it."
While BofA Securities projects global cloud and AI infrastructure capital expenditure will approach $1.5 trillion by 2027, Matt Kennedy of Renaissance Capital cautioned that future issuers might not find the same welcome. "SK Hynix gets its deal done on the strength of the story, but companies coming after it may face a tougher, more selective market," Kennedy said.
