SK Hynix's US ADR Offering Reportedly Over 7 Times Oversubscribed, AI Theme Favored by Market

Seoul (CNA, Seoul, July 9, Foreign News) - Sources familiar with the matter revealed that South Korean chip giant SK Hynix's approximately $28 billion US Depository Receipt (ADR) offering in the United States has reportedly been oversubscribed by more than 7 times, highlighting the favor this memory chip company, which plays a crucial role in the artificial intelligence (AI) supply chain, has garnered from investors.

Reuters reported that SK Hynix is issuing ADRs in the US to raise funds for building new factories and purchasing equipment to meet the soaring demand for AI chips.

SK Hynix's ADR offering is expected to be the second-largest stock fundraising deal in history, trailing only SpaceX's $85.7 billion initial public offering (IPO) set last month, surpassing Saudi Aramco's $25.6 billion IPO in 2019, and Alibaba's similarly sized listing in 2014.

SK Hynix declined to comment. The source requested anonymity due to the confidential nature of the stock offering details.

In addition to raising funds, SK Hynix's listing in the US is also expected to help narrow the valuation gap with its US rival Micron. Although Micron has a lower market share in key memory products, it benefits from direct access to the world's largest pool of investor capital.

Micron's current estimated forward 12-month P/E ratio is 6.66 times, while SK Hynix's is 5.5 times.

The final issue price for SK Hynix's ADR is expected to be finalized today and trading will commence on the Nasdaq tomorrow. (Compiled by Liu Shu-chin) 1150709

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