𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

South Korean chip giant SK Hynix has announced plans to raise up to $29.4bn through a US stock market listing, aiming to capitalise on the surging investor appetite for artificial intelligence (AI) stocks. The Nvidia supplier’s move is set to become one of the largest global offerings.

If completed at the indicative price, the deal would be the second-biggest share sale after a record $85.7 billion initial public offering by SpaceX earlier this month, surpassing Saudi Aramco’s $25.6 billion IPO in 2019 and Alibaba’s similar-sized offering in 2014.

The planned listing reflects strong global appetite for AI-linked equities, even as volatility increases across tech and semiconductor markets.

It comes weeks after record-breaking equity issuance elsewhere in the sector, including Elon Musk’s SpaceX, and ⁠ahead of expected IPOs from AI-focused companies including Anthropic and OpenAI later this year.

The ​world’s ⁠largest tech companies are tapping debt markets and raising equity to fund a costly expansion of AI infrastructure. Earlier this month, Google-parent Alphabet said it was looking to raise $80 billion in equity offerings.

“The most attractive benefit for investors is that ⁠SK Hynix will trade on Nasdaq alongside rival Micron, giving the company an opportunity to be re-rated in the U.S. market,” said Ryu ​Young-ho, a ⁠senior analyst at NH Investment & Securities.

“That could also ‌be reflected in its Korea-listed shares as investors increasingly link the two valuations.”

The memory chip maker, now valued at about $1.2 trillion, has been one of the clearest beneficiaries of the AI boom. Its shares have quadrupled so far this year, outperforming rivals Samsung Electronics and U.S.-based Micron.

The ‌company is a key supplier of high-bandwidth memory chips used in AI systems by ‌customers such as Nvidia and Google, and this week overtook Samsung to become South Korea’s most valuable company.

CLSA Senior Analyst Sanjeev Rana said expectations for a U.S. listing have already helped drive the stock’s rally, alongside strong demand for high-end memory used in AI data centres.

“If they can get at least a valuation multiple similar to Micron, for example, then the ⁠local shares also need to reflect that, so that kind of expectation is there,” Rana said. “I wouldn’t be surprised if this rally continues.”

Its blistering share price rally marks a dramatic reversal of fortunes for a chipmaker that two decades ago nearly collapsed under debt and also helped the size of the share sale increase sharply from an initial plan which a source said in March could raise as much as $14 billion.

Expansion

SK Hynix said the proceeds from the listing of American Depositary Receipts will be used to build chip factories in South Korea and purchase chipmaking equipment such as an extreme ultraviolet scanner made by Dutch equipment maker ASML , shares of which rose 1.1% on Wednesday.

The world’s second-largest ‌memory chipmaker plans to issue up to 17.79 million new shares, worth 45.45 trillion won ($29.43 billion), in the ADR listing on ​Nasdaq.

Ten ADRs will represent one common share. Pricing will be finalised after bookbuilding, although the initial range is based on ‌Tuesday’s closing price of 2.555 million won ($1,651.69).

It will kick off ⁠its ADR bookbuilding process on July 6 and determine the final offer price on July 9 ahead of its Nasdaq debut ⁠the following day.

“The ADR listing should not materially change our view on SK Hynix or the memory sector,” said Gary Tan, a Singapore-based portfolio manager at Allspring Global Investments.

“The ‌headline capital raise appears large but implies ​only limited dilution and remains modest relative to its mid-term capex plans.”

BofA Securities, ‌Citigroup Global Markets, Goldman Sachs and JP Morgan Securities are managing ​the offering, SK Hynix said.