South Korean chipmaker SK Hynix intends to price its American Depository Receipts at US$149 on Thursday to raise about US$26.5-billion, a person familiar with the matter said.<\/p>\n
The share sale decision comes as the company leverages its position as the leading supplier of high-bandwidth memory chips, a critical component for the \u2060advanced processors powering \u200bglobal artificial intelligence systems.<\/p>\n
Demand for SK Hynix\u2019s U.S. share sale was more than seven times available shares, another person familiar with the matter said, underscoring huge investor appetite for a pivotal company in the AI supply chain.<\/p>\n
SK Hynix declined to comment on the pricing and the demand for shares. The person declined to be identified as details of the share sale were confidential.<\/p>\n
It will start trading on Friday under the ticker symbol \u201cSKHY\u201d on Nasdaq. It had \u200breferenced a per share price of 242,500 won per ADR, based on the July 3 closing \u200cprice in Seoul. On Thursday, the stock closed at 2,186,000 won and ten ADRs represent one common share.<\/p>\n
The offering from the South Korean chipmaker will finance new factories and equipment to meet surging AI chip demand.<\/p>\n
In addition to bringing in funds, SK Hynix\u2019s U.S. listing is expected to help narrow its valuation gap with U.S. 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.<\/p>\n
Micron trades at a 12-month forward price-to-earnings ratio of 6.66 times \u200cversus SK Hynix\u2019s \u200b5.5 times.<\/p>\n
\u201cSK Hynix leads on share and Nvidia \u200cproximity, Micron competes on power efficiency, U.S. positioning, and momentum from third place,\u201d said Daniel Newman, CEO of tech research firm Futurum Group.<\/p>\n
Meanwhile, SK Hynix continues \u200bto battle its domestic rival, Samsung, for chip supremacy. Samsung Electronics remains the world\u2019s largest memory \u2060chipmaker by volume.<\/p>\n
SK Hynix has made its fortune by becoming the most sought-after supplier of high-bandwidth memory \u2060chips, a culmination of 14 years of bets that brought it skepticism and scorn but ultimately put it at the center of the global AI gold rush.<\/p>\n
\u201cAs long as there is demand \u200bfor 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 SK Hynix would continue to be the U.S. AI chipmaker\u2019s largest partner, adding that the current memory chip shortage would persist for a few years due to strong demand.<\/p>\n
Though shares in semiconductor companies globally have lost momentum in recent weeks, companies like SK Hynix and rival Samsung Electronics are sitting on historic gains as insatiable demand for computer chips to \u2060power AI data centers has sent profits soaring.<\/p>\n
\u201cAI demand keeps inflecting, currently driven by mostly by strong datacenter CPU demand. HBM demand also remains strong: we expect the market to grow from about US$65-billion this year to US$120-billion next year and about US$290-billion by 2030,\u201d said Rolf Bulk, Head of Semiconductors and Infrastructure, Futurum Equities.<\/p>\n
SK Hynix shares closed up 5 per cent on Thursday but have dropped by a quarter in the last two weeks. Even so, the stock is up 680 per cent for the past 12 months. As dizzying as that long-term share jump has been, the shares have not outpaced massive gains in profits \u2014 earnings so huge that \u2060each employee is expected to get an annual bonus of about US$574,500, making them highly \u200bsought-after marriage partners.<\/p>\n
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
\u201cSK Hynix holds the edge \u2060in production scale and maturity. Across the board, since demand is far outweighing supply, they have had tremendous pricing power,\u201d said Ken Mahoney, CEO of Mahoney Asset Management.<\/p>\n
\u201cSo, generally speaking, their first mover advantage is \u200cand was their strength.\u201d<\/p>\n
The ADRs will start trading on the Nasdaq on July 10. Bank of America, Citigroup, Goldman Sachs and J.P. Morgan are the underwriters. \u200bThe company\u2019s primary listing will remain in Seoul.<\/p>\n
SK Hynix has said Baillie Gifford Overseas, investment funds managed by Coatue Management and Situational Awareness Partners have each indicated interest in purchasing up to a combined US$7-billion of its U.S. ADRs.<\/p>\n
Lee Min-hee, an analyst at BNK Investment & Securities, said that contrary to some market expectations, he did not expect SK Hynix\u2019s U.S. listing to result in a major boost to its local shares.<\/p>\n
Domestic companies still need \u200bto contend with the so-called Korea discount \u2014 the tendency for them to trade at lower valuations due to concerns about corporate governance, he said.<\/p>\n","protected":false},"excerpt":{"rendered":"South Korean chipmaker SK Hynix intends to price its American Depository Receipts at US$149 on Thursday to raise…\n","protected":false},"author":2,"featured_media":80660,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[18487,18478,18488,1523,18470,18489,363,18469,18483,18484,18480,18471,18468,119,12048,77,18482,18476,18498,18472,18473,9581,171,18479,2659,1175,18490,18475,18493,18494,18496,8374,18495,4262,18492,18474,17865,18486,414,18485,18491,18477,1013,4714,18481,17057,76,18497],"class_list":["post-80659","post","type-post","status-publish","format-standard","has-post-thumbnail","category-korea","tag-alberta","tag-arts-news","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-canada","tag-canada-news","tag-canada-sports","tag-canada-sports-news","tag-canada-trafficcanada-weather","tag-canadian-breaking-news","tag-canadian-news","tag-economy","tag-education","tag-environment","tag-federal-government","tag-foreign-news","tag-globe-and-mail","tag-globe-and-mail-breaking-news","tag-globe-and-mail-canada-news","tag-government","tag-korean","tag-life-news","tag-lifestyle","tag-local-news","tag-manitoba","tag-national-news","tag-new-brunswick","tag-newfoundland-and-labrador","tag-northwest-territories","tag-nova-scotia","tag-nunavut","tag-ontario","tag-pei","tag-photos","tag-political-news","tag-political-opinion","tag-politics","tag-politics-news","tag-quebec","tag-sports-news","tag-technology","tag-travel","tag-trudeau","tag-us-news","tag-world-news","tag-yukon"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/80659","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=80659"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/80659\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media\/80660"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media?parent=80659"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/categories?post=80659"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/tags?post=80659"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}