The AI chip boom just created its biggest moment on Wall Street. SK Hynix, a South Korean memory chip giant, he said on Friday has grossed $26.5 billion (KRW 40 trillion) in its US market debut.
SK Hynix sold 177.9 million American depositary shares (ADRs) at $149 each, structured so that US investors could buy about one-tenth the cost of a full share in Seoul. That deal, the biggest US debut ever by a non-US company, topped the charts of Alibaba $25 billion IPO in 2014.
The company begins trading on the Nasdaq today, Friday, July 10, under the ticker SKHYV. Regular trading opens on Monday, July 13, when the ticker officially becomes SKHY. So far, US investors are embracing it. THE the stock opened up 14% over its IPO priceand the price was still rising in early trading on Friday.
That’s despite pricing its US shares at a 2.7% premium to its three-day moving average in Seoul, according to Korea Stock Exchange Deposit. However, the demand for the offer was according to information more than seven times the available shares, according to media reports.
This is particularly surprising given that Korean companies have long traded at a discount to their global counterparts. This valuation gap is called the Korea Discount. Investors often cite factors such as complex corporate governance structures, poor shareholder returns, regulatory uncertainty and geopolitical risks associated with North Korea to justify why companies from that country do not command higher share prices.
But SK Hynix is clearly not suffering from the discount in Korea, and that’s because it makes memory chips, including high-bandwidth memory (HBM). HBM is a key component of GPU AI processors. And right now, Nvidia relies on SK Hynix as one of its main suppliers.
According to his filing, the money raised by willing US investors will go to three places: a new fab in South Korea (now being built to address the global memory shortage caused by artificial intelligence); a new packaging facility in that country; and EUV scanners, the machines that make next-generation chips possible.
Meanwhile, US Commerce Secretary Howard Lutnick stopped by a Micron event on Thursday with a message for the broader chip industry, not just US memory maker Micron (which is one of SK Hynix’s biggest competitors). Lutnik according to information said it is already in talks with Samsung (the world’s third largest memory maker) and SK Hynix to build new plants in the US. The idea is to not let South Korea continue to be the dominant country in this important technology.
Micron, of course, is in announced his plans to invest $250 billion in new U.S. manufacturing, a commitment that the American memory chip company says will create more than 90,000 jobs and keep pioneering chip production on American soil.
The timing of Lutnick’s request is notable beyond this U.S. IPO for SK Hynix: Both Korean chipmakers just pledged more than $550 billion in new manufacturing investments in South Korea.
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