SK Hynix raises $26.5 billion in largest foreign IPO in US history, pushes for construction of new US factories

The AI ​​chip boom has just produced Wall Street’s biggest moment yet. SK Hynix, a South Korean memory chip giant, said on Friday it had raised $26.5 billion (40 trillion KRW) in its US market debut.

SK Hynix sold 177.9 million American depositary shares at $149 per share, structured so that US investors could buy at roughly a tenth of the full share cost in Seoul. The deal, the largest U.S. debut deal by a non-U.S. company, surpasses Alibaba’s $25 billion IPO in 2014.

The company begins trading on the Nasdaq Stock Exchange today, Friday, July 10, under the temporary ticker SKHYV. Regular trading begins on Monday, July 13, when the index officially becomes SKHY. Even now, American investors are following him. The stock opened 14% above its IPO price, and the price was still rising in early trading on Friday.

This is despite it pricing its US shares at a 2.7% premium compared to their three-day average price in Seoul, according to its filing with the Korea Stock Exchange. However, demand for supply was reportedly more than seven times the available shares, according to media reports.

This is especially surprising considering that Korean companies have long been trading at a discount to their global counterparts. This valuation gap is called the Korean discount. Investors often cite factors such as complex corporate governance structures, low shareholder returns, regulatory uncertainty, and geopolitical risks related to North Korea to justify why companies from that country should not demand higher stock prices.

But SK Hynix clearly does not suffer from the Korean opponent because it makes memory chips, including high-bandwidth memory (HBM). HBM is a key component of AI GPU processors. Currently, Nvidia relies on SK Hynix as one of its primary suppliers.

According to his request, the money raised from eager American investors will go to three places: a new factory in South Korea (now being built to address the global memory shortage caused by artificial intelligence); A new packaging facility in that country; and UV 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). Lutnick has reportedly said that he is already in talks with Samsung (the third largest memory maker worldwide) and SK Hynix about building new factories in the US. The idea is to not allow South Korea to continue to be the country that dominates this important technology.

It is natural for Micron to participate in this field, as it announced that it plans to invest $250 billion in new American manufacturing, a commitment that the American memory chip company says will create more than 90,000 jobs and maintain the production of advanced chips on American soil.

The timing of Lutnick’s request is notable after this U.S. IPO for SK Hynix: Both Korean chipmakers have just pledged more than $550 billion to invest in new manufacturing in South Korea.