SK Hynix just pulled off the biggest American depositary receipt offering a non-US company has ever done, and the South Korean won is already feeling it.
The memory chipmaker priced 177.9 million ADRs at $149 each on July 10, raising $26.5 billion, roughly 40 trillion won, in a single transaction. The won responded by climbing to its strongest level since May, gaining around 0.5% in early trading as investors anticipated what comes next: a massive conversion of dollar proceeds back into local currency.
How a chip deal moves an entire currency
SK Hynix is expected to funnel the ADR proceeds toward domestic semiconductor capacity, including the ambitious Yongin semiconductor cluster project. Those conversions are anticipated to hit the foreign exchange market around mid-July, which gives currency traders a fairly specific window to watch.
To put the scale in perspective, daily spot trading volume in the won market sits around $33 billion. SK Hynix’s conversion alone could represent nearly a full day’s worth of FX activity landing in a condensed timeframe.
