South Korean memory chipmaker SK Hynix has launched a record-sized share sale in the United States, raising approximately $28 billion through American depositary receipts (ADRs) in New York. This marks the largest share offering by a foreign company in the U.S., surpassing Alibaba's $25 billion initial public offering in 2014. The capital raised will support SK Hynix’s extensive investment plans tied to artificial intelligence (AI) technology.
While South Korea remains a dominant player in the global memory chip industry, the U.S. market continues to be a preferred venue for large-scale capital raises. Investor appetite for SK Hynix’s ADRs has been robust, with demand outstripping the shares available soon after the sale began. Several fund managers have reportedly sought approval for leveraged products linked to the ADRs, reflecting heightened trader interest in capturing amplified returns from daily price movements.
Despite strong demand in the U.S., SK Hynix’s stock on the Seoul Exchange has experienced volatility, declining about 25 percent over the past two weeks amid concerns about the rapid pace of AI-related investments. The shares have displayed substantial price swings throughout the year, moving more than 5 percent in either direction on at least 50 trading days, yet the stock has gained roughly 180 percent since the beginning of the year.
Some analysts suggest that SK Hynix might appear undervalued compared to its American peers in the semiconductor sector. Data from Visible Alpha indicates that U.S.-based Micron Technology is trading at about six times its forecasted earnings for 2028—the year when the current chip demand surge is expected to peak—while SK Hynix and South Korean rival Samsung Electronics are valued at earnings multiples closer to four.
The size of SK Hynix’s U.S. offering, while significant, represents less than 3 percent of the company’s nearly $1 trillion total market capitalization. Both SK Hynix and Samsung account for just over half of South Korea’s entire stock market value. Due to concentration limits on large institutional investors, these companies face challenges in attracting proportional equity holdings, which may weigh on their local share prices.
In theory, shares of SK Hynix traded as ADRs in the U.S. and those listed on the Korean exchange should converge in value. However, factors like exchange rate fluctuations, local market regulations, trading costs, and different time zones contribute to persistent price discrepancies. A comparable case is Taiwan Semiconductor Manufacturing Company (TSMC), whose U.S. ADRs have consistently traded at a premium—often 20 percent or more above its home market shares—partly due to the ability to swap ADRs for local shares unilaterally and greater liquidity on U.S. markets.
SK Hynix’s recent ADR issuance is expected to benefit from inclusion in various stock indices, potentially supporting stronger demand for its U.S.-listed shares. Historical patterns, such as TSMC’s premium reaching high levels during the smartphone boom before normalizing, suggest that such price differentials may eventually narrow over time.
Ultimately, the performance of SK Hynix’s U.S. shares may serve more as a barometer of investor enthusiasm surrounding the AI investment wave than as a straightforward indicator of the company’s intrinsic value.