SK Hynix rises 14% in $26.5bn Nasdaq debut
South Korean chipmaker SK Hynix's strong Nasdaq debut underscores persistent capital appetite for high-bandwidth memory, even as analysts warn of valuation fatigue in the crowded semiconductor trade.
SK Hynix’s American depositary receipts opened at $170, a 14% jump from the $149 offer price and a 2.7% premium to its three-day average in Seoul. The $26.5 billion raise, the second-largest U.S. share sale on record behind SpaceX, was more than seven times oversubscribed. The capital gives the chipmaker direct access to deep U.S. markets to fund new factory construction.
The listing targets a specific valuation gap. As the dominant producer of high-bandwidth memory (HBM) chips required for Nvidia and AMD AI processors, SK Hynix trades at roughly 5.8 times forward earnings. Its U.S. rival Micron, which has seen its stock surge 711% over the past year, commands a multiple closer to 7 times.
"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," said Giuseppe Sette, co-founder of Reflexivity. "SK Hynix gets its deal done on the strength of the story, but companies coming after it may face a tougher, more selective market."
The strong pricing arrives despite a recent sector cooldown. SK Hynix shares have fallen 25% from a record high set two weeks ago, though they remain up 630% year-over-year.
"Global semiconductors is the most crowded trade in the world right now," said Thomas Hayes, chairman at Great Hill Capital. "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."
Capital expenditures for global cloud and AI infrastructure are projected to approach $1.5 trillion by 2027, representing a 40% to 50% annual increase, according to BofA Securities. However, rising questions about the return on these investments have sparked concerns that hyperscalers could eventually slow their spending.
"Demand for the US share sale has been stronger than some people might have expected. That implies the memory chip rally might have just taken a breath rather than peaked," said Dan Coatsworth, head of markets at AJ Bell. Matt Kennedy, senior strategist at Renaissance Capital, added: "Investors will weigh the strength of the past year's rally against this latest volatility ... Oversupply fears are inherent to the industry."
