Bloomberg
SK Hynix Inc raised US$26.5 billion in its American depositary share offering, as the South Korean memory chipmaker powered through volatility to deliver the largest-ever US first-time share sale by a foreign company.The company sold 177.9 million American depositary receipts (ADRs) for US$149 each, according to a statement confirming an earlier Bloomberg News report.Each ADR is equivalent to one-10th of a Seoul-traded common share.
A man walks past the logo of SK Hynix during a semiconductor exhibition in Seoul on Oct. 24, 2024.
At US$26.5 billion, the offering tops Alibaba Group Holding Ltd’s (阿里巴巴) US debut to become the third-biggest listing in history, data compiled by Bloomberg showed.SK Hynix’s US offering gives the world’s top supplier of high-bandwidth memory (HBM) a powerful fundraising channel, tapping investors looking for more ways to play the red-hot artificial intelligence (AI) infrastructure trade.
It attracted indications of interest from Baillie Gifford, Coatue Management and Situational Awareness Partners for as much as US$7 billion of ADRs, its filing showed.SK Hynix priced the listing at about a 3 percent premium to Thursday’s closing price for the ordinary shares in South Korea, Bloomberg calculations showed.The ADRs are expected to trade above the equivalent share price in Seoul, due to restrictions on exchanging common stock for the US instruments.The decision not to entice buyers by offering ADRs at a discount to the local share price indicates that the company is confident that its US stock would meet a positive reception — even after days of wild swings in its share price in its home market — and reflects a desire not to leave too much money on the table.SK Hynix’s ADR offering joins a rush of tech giants tapping the market’s deep pools of capital to fund the buildout of AI infrastructure.SpaceX held the largest initial public offering in history earlier last month, while Alphabet Inc is set to raise US$85 billion to fund its AI plans.Investors are betting that robust AI-related demand represents a secular growth story for memory stocks, which have traditionally been viewed as more cyclical in nature, with demand and growth rising and falling alongside PC and smartphone cycles.The ADR sale is expected to help fund growing spending plans amid soaring demand for equipment used in AI computing. The company and Samsung Electronics Co are poised to ramp up investment in South Korea as part of a government-led initiative worth US$880 billion.The record-setting offering caps a dramatic success story lifting the firm into the upper ranks of AI infrastructure companies. An early shift to embrace HBM — and a relatively sluggish response by Samsung — made it the go-to provider for Nvidia Corp, bringing a huge windfall and vaulting the underdog past its rival by some measures.It controlled 57 percent of the global HBM market share by revenue in the fourth quarter of last year, Counterpoint Research data showed.SK Hynix’s ADR sale ended more than seven times oversubscribed, according to terms of the deal confirming an earlier Bloomberg News report.Nearly half of the ADRs were sold to the accounts placing the 10 largest orders, with interest approaching US$200 billion in demand, the terms showed.
