SK hynix Draws Orders 7 Times IPO Size on Nasdaq... Where Will the Nearly 40 Trillion Won in Funds Go?

Second-Largest U.S. Listing by a Foreign Company
Accelerating Domestic Facility Investments Including Yongin Cluster Phase 1 Fab

SK hynix’s demand forecast for its Nasdaq listing attracted orders more than seven times the number of shares offered. Ahead of this mega-listing, which is set to raise up to 40 trillion won, Wall Street is showing strong interest in the leading Korean artificial intelligence (AI) memory company. If successful, this will be the second-largest IPO by a foreign company debuting on the U.S. stock market, following Alibaba, and will serve as a stage where the global capital market directly evaluates the value of K-semiconductors.

According to the semiconductor industry and foreign news outlets on July 9, the demand forecast for SK hynix’s American Depositary Receipts (ADR) received orders exceeding 124.53 million shares—seven times the maximum 17.79 million new shares to be issued. In terms of subscription payments, this amounts to approximately $171.5 billion (about 258 trillion won).

Bloomberg reported, citing sources familiar with the matter, that a wide range of institutional investors participated in the offering, including global long-only funds, technology sector specialist funds, sovereign wealth funds, and global investors focused on Asia. It is reported that three major institutions—including a U.S. hedge fund established by a former OpenAI researcher—have expressed intentions to acquire up to $7 billion (about 10.7 trillion won). Analysts say the subscription fever demonstrates the market’s assessment of SK hynix as a leading company spearheading the AI semiconductor supercycle.

Buoyed by this strong demand, SK hynix ADRs will begin temporary trading on Nasdaq on July 10 (local time). ADRs are certificates issued by U.S. banks, representing shares of foreign companies deposited with local custodians, allowing U.S. investors to buy and sell them directly in dollars. One SK hynix ADR represents one-tenth of a common share. For this listing, up to 17.79 million new shares will be issued, accounting for about 2.5% of total outstanding shares.

The initial fundraising target was up to $29 billion (about 43 trillion won), but recent stock price declines are expected to reduce this figure. Based on the previous day’s closing price of 2,076,000 won per share, the scale is about $24.5 billion (about 37 trillion won). Even at this level, it would be the second-largest IPO by a foreign company on the U.S. stock market, following Alibaba’s $25 billion IPO in 2014. The final amount raised will depend on the offering price.

All proceeds from the IPO will be used for domestic capital expenditures (CAPEX). With global AI demand driving a deepening shortage of memory supply, the company plans to accelerate production capacity expansion. Last month, SK hynix unveiled a mid- to long-term investment strategy worth 1,100 trillion won as part of its three major mega projects.

The largest portion of funds will go to the first phase of the Yongin Semiconductor Cluster fab. With a new investment of 2.16 trillion won for the construction of five remaining cleanrooms and additional infrastructure approved, the total project cost for a single fab has soared to a record 3.1 trillion won. Excluding the previously invested 438 billion won, approximately 2.662 trillion won will be invested going forward, and the cleanroom opening date has been moved up by about three months to February 2027.

About 1.9 trillion won will be invested in P&T7 in Cheongju, which broke ground in April. P&T7 is a dedicated advanced packaging fab essential for producing AI semiconductors such as High Bandwidth Memory (HBM). An additional 1.2 trillion won will be spent on advanced equipment, including ASML’s extreme ultraviolet (EUV) lithography machines. Any funding shortfall will be covered by operational cash flow and borrowings.

SK Group Chairman Chey Tae-won is announcing investment plans at the National Report Meeting for the Three Major Mega Projects, chaired by President Lee Jae-myung at the Blue House on the 29th of last month. Photo by Yonhap News

This listing is also expected to help SK hynix achieve its earlier-stated goal of securing 100 trillion won in net cash more quickly, while providing an opportunity to address its long-standing undervaluation. Despite its overwhelming HBM market share and strong performance, SK hynix’s price-to-earnings ratio (PER) has remained at 6.2 times, lower than the average forward PER of 7.2 times for overseas competitors such as Micron and Kioxia.

The research center at Hanwha Investment & Securities stated, "SK hynix will now be evaluated in the same market as peer companies such as Micron and SanDisk, which are listed on the U.S. stock market," adding, "Given its valuation appeal, profit size, and technological leadership, this is a golden opportunity for a corporate value re-rating."

Kim Yongseok, Distinguished Professor at Gachon University College of Semiconductor, commented, "This listing will mark a turning point for expanded investment in HBM and memory technology development," and noted, "It could prompt competitors such as Samsung Electronics to consider ADR listings as well." Kim Yangpaeng, a researcher at the Korea Institute for Industrial Economics and Trade, added, "If cash flow improves, the company can enhance its capabilities in areas where it currently outsources, such as advanced packaging handled by TSMC, and further strengthen its leadership in the DRAM sector."

SK Group Chairman Chey Tae-won will also travel to the U.S. for the listing. On the morning of July 10 in New York, Chairman Chey, together with SK hynix CEO Kwak Nohjung and other key executives, will attend the listing ceremony and directly communicate the company’s technological competitiveness and growth strategy to global investors. Earlier this year, in his book "Super Momentum," which covers the growth story of SK hynix’s HBM business, Chairman Chey stated, "Hynix needs to become ten times bigger than it is now."

The business community is also watching the possibility that Chairman Chey will hold a series of meetings with big tech executives from companies such as Nvidia and Tesla during his stay in the U.S. In February, Chairman Chey met with Nvidia CEO Jensen Huang in Silicon Valley to discuss cooperation in HBM and AI data center construction, and reaffirmed the partnership when CEO Huang visited Korea last month.

This content was produced with the assistance of AI translation services.