Shares in South Korean chip maker SK Hynix soared as much as 17% in their Nasdaq trading debut on Friday, after the company raised $26.5bn (£19.8bn) in the largest ever listing by a foreign firm in the United States.
The company, a key supplier of advanced memory chips to AI giant Nvidia, sold 177.9 million American depositary shares (ADS) at $149 each. The offering was more than seven times oversubscribed, according to US media, allowing SK Hynix to charge a price 2.9% higher than its current stock price in Seoul.
“SK Hynix raised $26.5bn in its US listing, the largest foreign IPO in history, as shares surged 17% on debut.”
Each ADS represents one-tenth of a Seoul-traded common share, giving US investors a way to buy into the company without trading on a foreign exchange. The listing was led by BofA Securities, Citigroup Global Markets, Goldman Sachs (Asia) and JP Morgan Securities.
SK Hynix has seen its market value top $1tn in South Korea since May, lifted by the boom in demand for AI chips. Its share price has more than tripled in Seoul this year, helping push the benchmark Kospi index up by more than 70%. Rivals Samsung Electronics and Micron have also seen their shares more than double in recent months, with the three firms dominating the global market for high-bandwidth memory (HBM) used in AI servers.
The AI boom has triggered a rush of companies raising money on stock markets. In June, SpaceX became the world’s biggest ever listing with $85.7bn, while AI developers Anthropic and OpenAI are preparing to go public with valuations of more than $1tn. SK Hynix’s $26.5bn haul beat Saudi Aramco’s 2019 debut of $25.6bn and Alibaba’s $21.8bn New York IPO.
The International Monetary Fund (IMF) said this week that a global surge in AI infrastructure spending is actively shielding tech-heavy economies, including South Korea, from the growth-stifling effects of the war in the Middle East.
“They’re using the money they’re raising from this US listing to help build more plants,” said Seoul National University finance professor Jaewon Choi, who noted that the US listing gives SK Hynix easier access to huge amounts of potential investment with fewer barriers than South Korea. Traders are watching the listing as a “yardstick to test the water” for whether investor enthusiasm for memory chip makers will continue, Choi added.
The company has pledged major investments to develop South Korea’s chip making and AI capabilities in the coming years. The listing also sparked cultural buzz: an image of an SK Hynix jacket went viral in South Korea this year as a symbol of wealth and success.
Yet questions remain over whether the AI spending surge can sustain the dizzying valuations. Tech stocks have tumbled in recent weeks on fears of overheated valuations and concerns about when enormous global AI spending will reap returns. For now, investors have shown they are willing to pay a premium for a ticket to the AI supply chain.