S. Korean chipmaker raises $26.5b in Nasdaq debut

South Korean memory chipmaker SK Hynix debuted on the Nasdaq on Friday after completing its US listing, capitalizing on surging demand driven by the global artificial intelligence boom.

The company priced its American Depositary Receipts at $149 each on Thursday before they opened at $170 in Nasdaq trading on Friday. An ADR is a type of certificate that allows United States investors to buy a foreign stock without trading directly on an overseas exchange.

The sale of 177.9 million ADRs raised $26.5 billion, making it the largest US share sale by a foreign issuer and the second-largest public offering after SpaceX's $85.7 billion IPO in June.

SK Hynix said the proceeds will be used to build new chip factories in South Korea and purchase manufacturing equipment, including extreme ultraviolet lithography scanners from Dutch supplier ASML.

Chief executive Kwak Noh-jung told Bloomberg after the offering that customers are signing long-term supply contracts because they expect the chip shortage to "last for longer", adding that he believes supply constraints could last well into the next decade.

The listing comes as SK Hynix rides an unprecedented surge in demand for high-bandwidth memory chips, which enable high-speed, low-power data transfer in AI systems and are essential for hardware used by customers including Nvidia and Google.

SK Hynix, which recently deepened its partnership with Nvidia on advanced memory chips, has outperformed rivals Samsung and Micron over the past year. Its first-quarter revenue nearly tripled from a year earlier, while its shares have climbed about 260 percent this year.

As hyperscalers — large-scale cloud service providers — such as Amazon, Microsoft and Oracle race to expand AI data centers, demand for memory chips has consistently outpaced supply, pushing up prices. Apple has raised prices for Macs and iPads, citing higher memory component costs.

The AI boom has also lifted Asian chip suppliers. Taiwan-based printed circuit board maker Unimicron Technology recently raised $1.36 billion through a global depositary share sale, with its stock up more than 700 percent over the past year.

Analysts describe the current environment as a memory "super-cycle", with Samsung, SK Hynix and Micron all benefiting. Some view SK Hynix's US listing as a move to broaden its investor base and narrow its valuation gap with Micron, though others caution that market volatility remains despite strong demand.

'Inflation' warning

Some analysts have warned that "memory inflation" could eventually curb spending on AI infrastructure, smartphones and personal computers, saying the industry has entered the middle stage of the current cycle.

South Korean companies led by SK Hynix and Samsung plan to invest more than $500 billion in new domestic memory fabrication plants. Analysts warn the expansion could create oversupply if AI memory demand shifts by the time the facilities come online.

For some observers, the listing carries significance beyond financial markets.

"The real story of the semiconductor industry is not about the US versus China — it is about a multilateral ecosystem in which South Korea, Japan and the Netherlands are just as important as either of the great powers," said Ker Gibbs, former president of the American Chamber of Commerce in Shanghai.

Gibbs explores that argument in his book The Fragile Dragon, comparing semiconductors with oil as strategic resources that nations both depend on and compete over.

He also pointed to history as a cautionary lesson, arguing that the US should tread carefully as it tightens restrictions on China's access to chip technology. In his view, the two countries need to manage their differences without cornering one another.