South Korean memory chipmaker SK Hynix, a rival of US-based Samsung and Micron, plans to sell nearly 17.8 million shares in a US IPO, the company he said on Monday. If its shares sell well (and there are signs they will), the company could raise about $28 billion, based on SK Hynix’s closing share price last Friday in Seoul. reports Bloomberg.
SK Hynix will offer American Depositary Receipts (ADRs), a type of certificate that allows US investors to buy a foreign stock without trading directly on a foreign exchange. Each ADR will represent one-tenth of one common share. It is expected to price those securities on Thursday and begin trading on Friday.
Like Micron, SK Hynix is riding an AI-driven boom and crediting AI in both sales and stock price. First-quarter revenue was up nearly 200% from the same quarter last year, he said, and its stock is up about 260% so far this year. This is because systems running artificial intelligence are memory intensive. As hyperscalers like Amazon, Microsoft, Google, and Oracle scramble to build so-called AI factories, and as new AI data centers proliferate nationwide, demand has outstripped supply, creating a shortage of memory chips — including high-bandwidth memory (HBM), DRAM, and NAND (the different types of chips that store and move data inside AI systems). The situation was called “RAMageddon”. Apple executives said the shortage is forcing it to raise prices on Mac computers and iPads.
South Korean technology companies, led by SK Hynix and Samsung, have pledged to spend more than $550 billion to develop new manufacturing capacity to keep up. This is actually a risky venture. By the time these facilities are built, memory needs for AI may change, leaving them in more supply than the market wants and possibly driving down prices. But for now, Wall Street is looking for another Nvidia, and the memory chip maker is among the closest options they have.
Micron, the closest US comparison, has soared nearly 700% in the past year to a valuation of more than $1 trillion, fueled by demand and revenue from record AI-based memory.
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