South Korea's SK Hynix slides over 5% ahead of $29 billion Wall Street debut

Shares of South Korea's SK Hynix slipped over 5%, hitting an intraday low on Monday ahead of its Wall Street debut, with the company set to launch a US listing expected to raise about $29 billion, Reuters reported. The blockbuster offering comes as the chipmaker looks to capitalise on surging global demand for artificial intelligence.

The company will issue 17.79 million new shares in the form of American Depositary Receipts (ADRs) on Nasdaq, with every 10 ADRs representing one common share.

The stock will be sold in a price range to be revealed on Monday, based on SK Hynix's Seoul trading price, with the final New York listing price set on Thursday ahead of its trading debut on Friday, according to regulatory filings.


The company's management will meet global investors during a roadshow scheduled for this week to promote the offering.

If completed as planned, the deal would rank as the world's second-largest share sale, behind only SpaceX's record $85.7 billion initial public offering last month. It would also overtake Saudi Aramco's $25.6 billion IPO in 2019 and Alibaba's similarly sized offering in 2014, according to Reuters.

SK Hynix rides AI boom despite over 5% slide

SK Hynix shares fell over 5% on Monday, in line with a broader market decline that saw South Korea's KOSPI index drop 2.2%. Despite the day's losses, the stock has surged about 273% so far this year, fuelled by strong investor enthusiasm for AI-related companies.

Last month, HSBC raised its valuation of SK Hynix, citing the company's stronger focus on shareholder returns and improved access for global investors through initiatives such as its US listing, Reuters reported.

SK Hynix has emerged as one of the biggest winners from the AI boom, outperforming rivals Samsung Electronics and Micron. The company supplies high-bandwidth memory (HBM) chips used in AI systems developed by customers including Nvidia and Google.

Last week, SK Hynix announced plans to invest 100 trillion won ($64.38 billion) to build new chip manufacturing facilities, including a NAND flash memory plant, as part of South Korea's broader push to expand its semiconductor industry and capitalise on growing AI demand.

Analysts expect the company to be included in the Philadelphia Semiconductor Index following its Nasdaq listing, a move that could attract more passive investment flows. They also believe the US listing could help narrow SK Hynix's valuation gap with its smaller American rival, Micron, according to Reuters.

South Korea doubles down on AI and chip leadership

South Korea last week unveiled an ambitious industrial strategy focused on semiconductors and artificial intelligence, backed by a $576 billion investment programme to build a major chip manufacturing hub in the country's southwest. The initiative aims to strengthen the country's position in the global AI race, Reuters reported.

The government stated that SK Hynix and Samsung Electronics will play a central role in driving the investment program.

On Monday, South Korean President Lee Jae Myung directed officials to fast-track the flagship chip and AI projects announced last week. He cautioned that delays in approvals, land acquisition, or securing adequate power and water supplies could hurt the country's ambition to lead in advanced technologies.

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