SK Hynix Prepares for Record-Breaking IPO: Media Reports Reveal U.S. Offering Price

South Korean memory chip maker SK Hynix has informed investors that it intends to set the price of its American Depositary Receipts, which are scheduled to are set to debut on the Nasdaq at $149, according to sources cited by Bloomberg and a Reuters source. This is approximately 3.1% higher than the company’s closing price on the Seoul Stock Exchange on Thursday.

At that price, the offering would raise about $26.5 billion, according to both agencies. If so, it would become the largest initial public offering by a foreign company in U.S. history, surpassing Alibaba Group’s debut, which sold $25 billion in ADRs in 2014, Bloomberg notes.

Discussions regarding the terms are still ongoing, and the details may change, the agency's sources said. SK Hynix did not respond to a request for comment.

Earlier this week, Bloomberg reported that demand for the company’s securities was seven times higher than supply. Applications to participate in the offering were submitted by global funds focused on long-term investments, funds focused on the technology sector, sovereign wealth funds, and investors focused on Asia.

The decision to proceed with the offering stems from SK Hynix’s desire to capitalize on its status as the largest supplier of high-bandwidth memory chips—a key component for cutting-edge processors used in artificial intelligence systems, Reuters notes. The company has invested in this technology for 14 years, despite skepticism and criticism, and has ultimately found itself at the center of the global AI boom, the agency reports.

Meanwhile, the IPO is taking place amid sharp fluctuations in SK Hynix’s stock price. At the close of trading on Thursday, the stock had fallen 25% from the peak it reached in late June. Nevertheless, its market capitalization has more than tripled since the beginning of the year.

Competitors, including the U.S.-based Micron Technology, are experiencing similar volatility. According to Bloomberg, investor enthusiasm for companies benefiting from large-scale investments in artificial intelligence infrastructure is beginning to wane.

In addition to raising capital, a U.S. listing is expected to help narrow the valuation gap between SK Hynix and Micron. Despite having a smaller market share in key memory segments, the U.S. manufacturer benefits from direct access to the world’s largest pool of investors, Reuters notes.

"Demand for AI solutions continues to accelerate, primarily due to strong demand for server processors. Demand for high-bandwidth memory also remains strong: we expect this market to grow from approximately $65 billion this year to $120 billion next year and to about $290 billion by 2030,” — predicts Rolf Bulk, head of the semiconductors and infrastructure division at Futurum Equities.

This article was AI-translated and verified by a human editor