SK hynix plans to list on a U.S. stock exchange this week to raise approximately $28 billion in new capital. The South Korean memory chip manufacturer aims to expand its investment capacity at a time when global demand for AI memory remains at an all-time high.
The company is offering nearly 17.8 million American Depositary Receipts (ADRs) on the U.S. stock market, according to SiliconANGLE. Each ADR represents one-tenth of a common share. The price is expected to be set on Thursday, after which the ADRs will become tradable on Friday.
The IPO gives U.S. investors their first direct way to invest in SK hynix. Until now, this was primarily possible through investment funds that combine multiple memory chip manufacturers.
SK hynix, along with Samsung and Micron, is one of the leading suppliers of memory chips for AI systems. Demand for high-bandwidth memory (HBM), in particular, has skyrocketed in recent years. This type of memory is essential for training and running large AI models and is a key component of modern AI accelerators.
Not only HBM, but also DRAM and NAND flash memory have become scarce as hyperscalers and cloud companies worldwide are rapidly building new AI data centers. This combination of strong demand and limited production capacity has driven up memory chip prices significantly.
This trend is also reflected in SK hynix’s financial performance. First-quarter revenue was nearly three times higher than a year earlier, while the stock has risen more than 260 percent since the start of this year.
Additional capital for expansion
With the proceeds from the IPO, SK hynix can further expand its production capacity. Together with Samsung, the company is investing hundreds of millions of dollars in new production facilities to meet the growing demand from the AI sector.
However, according to some analysts, this comes with a risk. New factories won’t be operational for several years. By that time, demand for specific memory chips may have changed, leading to overcapacity and putting pressure on prices.
Other market experts, however, expect demand for AI memory to remain high for the time being. Investments by hyperscalers and AI companies continue to rise, allowing memory chip manufacturers to benefit from favorable market sentiment. Reuters also notes that analysts expect investor interest in the IPO to remain strong despite recent volatility in the financial markets.
According to documents the company filed with the U.S. securities regulator, the offering price will be set on Thursday. Trading in the ADRs will then begin on Friday. In the run-up to the IPO, management is meeting with international institutional investors this week during a roadshow.