SEOUL: Demand for SK Hynix\u2019s $28 billion US share sale was more than seven times available shares, a person familiar with the matter said, underscoring huge investor appetite for a pivotal company in the AI supply chain. The offering from the South Korean chipmaker, which will finance new factories and equipment to meet surging AI chip demand, is set to be the world\u2019s second-biggest share sale after SpaceX\u2019s record-breaking $85.7 billion IPO last month.<\/p>\n
SK Hynix declined to comment. The person declined to be identified as details of the share sale were confidential. In addition to bringing in funds, SK Hynix\u2019s US listing is expected to help it narrow its valuation gap with US rival Micron, which, despite having less market share in key memory products, has benefited from direct access to the world\u2019s largest pool of investors. Micron currently trades at a 12-month forward price-to-earnings ratio of 6.66 times versus SK Hynix\u2019s 5.5 times.<\/p>\n
SK Hynix has made its fortune by becoming the most sought-after supplier of high-bandwidth memory (HBM) chips, a culmination of 14 years of bets that brought it skepticism and scorn but ultimately put it at the centre of the global AI gold rush. \u201cAs long as there is demand for graphic processors and AI data centers, SK Hynix is indispensable,\u201d said Yoo Hoi-jun, an electrical engineering professor at the Korea Advanced Institute of Science & Technology.<\/p>\n
Nvidia CEO Jensen Huang said last month that SK Hynix would continue to be the US AI chipmaker\u2019s largest partner, adding that the current memory chip shortage would persist for a few years due to strong demand. Though shares in semiconductor companies globally have lost momentum in recent weeks, firms like SK Hynix and rival Samsung Electronics are sitting on historic gains as insatiable demand for computer chips to power AI data centers has sent profits soaring.<\/p>\n
SK Hynix shares closed up 5 percent on Thursday but have dropped by a quarter in the last two weeks. Even so, the stock is up 680 percent for the past 12 months. As dizzying as that longer-term share jump has been, the shares have not outpaced massive gains in profits \u2014 earnings so huge that each employee is expected to get an annual bonus of about $574,500, making them highly sought-after marriage partners. Tellingly, the firm\u2019s 12-month forward price-to-earnings ratio has dropped, with its current level of 5.5 times down from 7.9 times at end-October.<\/p>\n
SK Hynix plans to set the final price of the ADR offering on Thursday and the ADRs will start trading on the Nasdaq on July 10. Ten ADRs will represent one common share and a Monday filing gave a reference price of 242,500 won per ADR, based on SK Hynix\u2019s July 3 closing price in Seoul. On Thursday, the stock closed at 2,186,000 won. SK Hynix has said that Baillie Gifford Overseas, investment funds managed by Coatue Management and Situational Awareness Partners have each indicated interest in purchasing up to a combined $7 billion of its US ADRs. Lee Min-hee, an analyst at BNK Investment & Securities, said that contrary to some market expectations, he did not expect SK Hynix\u2019s US listing to result in a major boost to its local shares. Domestic companies still need to contend with the so-called Korea discount \u2014 the tendency for them to trade at lower valuations due to concerns about corporate governance, he noted. \u2013 Reuters<\/p>\n","protected":false},"excerpt":{"rendered":"SEOUL: Demand for SK Hynix\u2019s $28 billion US share sale was more than seven times available shares, a…\n","protected":false},"author":2,"featured_media":80582,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[43343,29170,22100,43345,112,43344,241,24601,5206,1332],"class_list":["post-80581","post","type-post","status-publish","format-standard","has-post-thumbnail","category-seoul","tag-hynixs","tag-listing","tag-more","tag-oversubscribed","tag-seoul","tag-seven","tag-sk","tag-than","tag-times","tag-us"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/80581","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/comments?post=80581"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/80581\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media\/80582"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media?parent=80581"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/categories?post=80581"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/tags?post=80581"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}