The IPO in the United States of SK Hynix has aroused much greater interest than expected. Specifically, hedemand has multiplied by seven the number of shares available with respect to the 28,000 million dollars that he aspired to raise the company through an offering of 17.79 million common shares. According to sources such as ‘Reuters’ and ‘Bloomberg’, the share offering attracted orders worth approximately $171.5 billion. In fact, ‘Bloomberg’ indicates that firms such as Baillie Gifford, Coatue Management and Situational Awareness have expressed interest in acquiring ADRs worth up to $7 billion. «These important commitments indicate that the world’s largest investors continue to view memory manufacturers as some of the main long-term beneficiaries of the AI revolution«, highlights XTB. SK Hynix plans to set the final price of its ADR (American Depositary Receipts) offering on Thursday, and these securities will begin trading on the Nasdaq this Friday, July 10. Each 10 ADRs will represent one common share. A document filed on Monday set a reference price of 242,500 won per ADR, based on the closing price of SK Hynix shares in Seoul on July 3. The placement on Wall Street of the South Korean chip manufacturer, which will finance new factories and equipment to meet growing demand for components to develop AI, could thus become the second largest share placement in the world, only behind SpaceX’s IPOwhich raised a record $85.7 billion last month. «This suggests that the world’s largest investment funds did not see the recent correction as the end of the artificial intelligence (AI) cycle, but rather as an opportunity to increase your exposure to one of the world’s leading AI memory suppliers«, they explain from XTB. Likewise, these experts highlight that another «strategic milestone» is the personal participation of SK Group president Chey Tae-won. According to industry sources, he will attend the ADR listing ceremony on Nasdaq on Friday along with SK Hynix CEO Kwak Noh-jung and other senior executives. During the event, the group’s management is expected to present to global investors the company’s technological advantages and its long-term growth strategy in AI. In addition to raising financing, the listing of SK Hynix in the United States is expected to contribute to close the valuation gap with its US rival Micron. Despite having a smaller market share in key memory products, the North American company has benefited from having direct access to the largest capital market in the world. According to some analysts, South Korean companies continue to face the so-called «Korean discount» (‘Korea discount’), that is, the tendency to trade at lower valuations due to investor concerns about the corporate governance of the country’s companies. SK Hynix has become one of the most popular stocks in the market after becoming the most in-demand supplier of high-bandwidth memory (HBM) chips. This is the fruit of a 14-year strategy that was initially met with skepticism and criticism, but ultimately placed it at the center of the global artificial intelligence boom. «Each increase in GPU shipments is accompanied by increasing demand for advanced HBM memory,» XTB emphasizes. The CEO of Nvidia, Jensen Huangstated last month that SK Hynix will remain the US AI chipmaker’s largest partner, adding that the current shortage of memory chips will persist for some years due to strong demand. Chey Tae-won is expected to meet with executives from major American technology companies, such as the aforementioned Nvidia or Tesla, to highlight the strategic importance of alliances with the world’s largest AI infrastructure clients. All in all, this IPO in the US comes at a difficult time for the company, which has fallen around 30% from the highs reached in June. Even so, the company has appreciated 680% in the last twelve months thanks to investor interest in memory manufacturers such as Samsungwhich seems to be the cause of these latest cuts after publishing historical results that, however, were not enough for the market.
«The fundamentals of the semiconductor sector remain strong, but Investors’ inclination to take profits is slowing market momentum and causing episodes of volatility in both the Asian and US indices,» says Kathleen Brooks, research director at this public offer. «Will SK Hynix be able to maintain its profits if the enthusiasm for investment linked to artificial intelligence begins to lose steam?» says Brooks.
