Chip giant SK Hynix raises $26.5bn as shares surge in bumper US listing

Demand for SK Hynix’s offering was reportedly over seven times more than the number of stocksavailable, highlighting the strong investor appetite for a key firmin the AI supply chain.

The bumper appetite effectively means investors were so desperate to buy the stocksthat the firmwas able to charge a price 2.9% higher than its current stock price in Seoul, rather than offering a traditional discount.

Each American depositary share is equivalent to a tenth of a Seoul-traded common share, SK Hynix said.

The offering gives US investors a way to buy SK Hynix stockswithout having to trade via an overseas stock exchange.

The firmhas pledged major investments to develop South Korea’s chip making and AI capabilities in the coming years.

“They’re using the fundsthey’re raising from this US listing to help build more plants, to develop these high-end chips,” Shanti Keleman, co-chief investment officer at Seven Investment Management, told the BBC.

“They’re going to be building those plants in Korea and obviously the US has a lot of people willing to invest so it makes sense to go there to raise the money.”

However, Hanyang University enterpriseprofessor Yun Youngjin statedwhile South Korea’s administrationwas likely to be counting on the move to raise funds for domestic investments, a Nasdaq listing carries some risks, especially if investors move fundstowards the US and away from South Korea’s stock market.

In June, the country’s administrationunveiled plans for more than $880bn of investments in partnership with SK Hynix and Samsung.

Both SK Hynix and Samsung have stock industryvaluations of more than $1tn, joining a growing group of firms which includes tech giants Nvidia, Apple, Microsoft and Google-owner Alphabet.