SK Hynix Breaks Records: $26.5 Billion US Share Sale Largest by Foreign Firm

South Korean chip maker SK Hynix has raised $26.5 billion in a share offering on the New York Stock Exchange, marking the largest ever listing by a foreign company in the United States. The company sold 177.9 million American depositary shares at $149 each. The shares are set to begin trading on the Nasdaq on Friday.

SK Hynix, a key supplier to AI chip giant Nvidia, has seen its market value surge past $1 trillion in South Korea earlier this year, driven by booming demand for artificial intelligence chips. Its share price has more than tripled in Seoul in 2023, contributing significantly to the benchmark Kospi index's rise of over 70%.

The company is one of the world's leading memory chip makers, along with rivals Samsung Electronics and Micron. The industry has been buoyed by hundreds of billions of dollars in AI-related investments. Shares of Samsung and Micron have more than doubled in recent months.

The US listing provides SK Hynix with easier access to capital from the world's largest economy, which has fewer regulatory barriers compared to South Korea, according to Jaewon Choi, a finance professor at Seoul National University. Traders are closely watching the listing as a yardstick to gauge continued investor enthusiasm for memory chip companies.

Demand for the offering reportedly exceeded the available shares by over seven times, highlighting strong investor appetite for a key player in the AI supply chain. Each American depositary share represents one-tenth of a common share traded in Seoul.

The offering allows US investors to buy SK Hynix shares without trading on an overseas exchange. The company has pledged major investments to develop South Korea's chip-making and AI capabilities in the coming years. The South Korean government is expected to benefit from the funds raised, potentially supporting domestic investments, said Yun Youngjin, a business professor at Hanyang University.

However, the Nasdaq listing carries risks, including the possibility of capital flowing away from South Korea's stock market. In June, the government announced plans for over $880 billion in investments in partnership with SK Hynix and Samsung. Both companies now have stock market valuations exceeding $1 trillion, joining a select group that includes Nvidia, Apple, Microsoft, and Alphabet.