South Korean chip giant SK hynix seeks US$29bil in Nasdaq listing

SK hynix, a key supplier to the world’s most valuable company Nvidia, has seen profits soar due to frenzied global demand for the hardware that powers AI tools. (AFP pic)

SEOUL: South Korea’s SK hynix, a maker of memory chips for artificial intelligence data centres, said Wednesday it plans to raise 45.45 trillion won (US$29 billion) through a listing on Wall Street’s tech-heavy Nasdaq stock index.

It marks a major push by the company to broaden its access to US capital markets, where its share sale could be one of the largest of all time.

SK hynix, a key supplier to the world’s most valuable company Nvidia, has seen profits soar due to frenzied global demand for the hardware that powers AI tools.

The company said in a regulatory filing that it had “decided to conduct a public offering of American Depositary Receipts through the issuance of new shares and list them on Nasdaq” on July 10.

It plans to issue 17.79 million new shares. ADRs allow US investors to trade shares of foreign companies on American exchanges.

SK hynix said proceeds from the offering would be used to fund chip facilities – including its first fab at South Korea’s Yongin semiconductor cluster, an advanced packaging facility in Cheongju, and chipmaking equipment.

“We anticipate that the ADR listing will broaden our investor base, ultimately enabling a proper valuation of our corporate value, and further elevate our status as a global company by expanding our presence in the US, the epicentre of AI technological innovation,” it said in a statement.

The company filed an application with the US Securities and Exchange Commission in March to begin the listing process.

Its shares in Seoul have skyrocketed more than 300% this year, and its market value topped US$1 trillion for the first time in May.

On Monday, it briefly overtook rival Samsung Electronics as South Korea’s most valuable listed company by market capitalisation.

Along with Samsung, SK hynix is supplying advanced high-bandwidth memory (HBM) components to US industry titan Nvidia for its cutting-edge “Vera Rubin” AI platform, which is expected to further boost the technology’s capabilities.

Massive demand has led to a global shortage of the memory chips made by SK hynix and Samsung Electronics, whose workers’ union recently agreed a deal on bonuses after threatening to strike.

To address the shortage, “we will double our total production capacity (of silicon wafers) within the next five years”, Chey Tae-won, chair of SK hynix’s parent company, told reporters in Taiwan this month.

However, Chey also reiterated his prediction that memory shortages could persist until 2030.