AI triggers a wave of Asian storage giants going public in the US: SK Hynix is reportedly planning to file with South Korean regulators to issue ADRs, raising up to $26 billion.

According to reports, SK Hynix is expected to submit a filing to South Korea's financial regulatory agency regarding the issuance of American Depositary Receipts (ADRs). Based on the significant increase in SK Hynix's market value, industry insiders estimate that this issuance could raise as much as 40 trillion Korean won (approximately 26 billion US dollars), which would be comparable to the fundraising scale of Alibaba Group Holding Limited Sponsored ADR's listing in the US in 2014, setting a record for the largest IPO at that time. This filing is a key step for the semiconductor manufacturer to enter the US stock market. Previously, SK Hynix's stock price experienced a historic increase, helping South Korea's stock market achieve the best performance globally. Reportedly, SK Hynix plans to issue stocks in South Korea and deposit them with a South Korean securities depository, which will serve as the underlying securities for the ADR. The regulatory review by South Korean authorities is expected to be completed by July 3, meaning that ADR trading could start as early as next month. SK Hynix first disclosed its plans to list in the US back in March, stating that the company planned to issue ADRs in New York in the second half of this year. This issuance is expected to be one of the largest overseas equity financing cases for a South Korean company. Media outlets had reported back then that this ADR issuance could raise as much as 10 billion US dollars, but the final scale has not been determined yet. When asked about the target fundraising scale at that time, SK Hynix CEO Kwak Noh-Jung told shareholders that a decision had not been made yet, but the company hopes to enhance its value like other artificial intelligence hardware suppliers. Leveraging its leading position in the High Bandwidth Memory (HBM) chip sector, SK Hynix has become one of the biggest beneficiaries of the artificial intelligence boom, with its stock price soaring over 300% this year. HBM is widely used in NVIDIA Corporation's artificial intelligence accelerator products. SK Hynix stated that listing in the US will broaden its global investor base and improve capital market financing channels. Analysts also point out that listing in the US will help raise SK Hynix's profile among global investors, narrowing the valuation gap with its American semiconductor peers. However, Pepperstone research strategist Dilin Wu warned that investors need to weigh the benefits of increased global visibility against the short-term risk of share dilution. "Issuing new shares will inevitably dilute existing equity, and any expectations that the company is raising funds at the peak of the industry cycle could put pressure on market sentiment." Reportedly, Citigroup, JPMorgan, Goldman Sachs Group, Inc., and Bank of America Corp are arranging the issuance of ADRs for SK Hynix. It is worth noting that Japanese storage giant Kioxia Holdings also announced last month that it is planning to list in the US. In a statement, Kioxia stated that the main purpose of advancing the secondary listing in the US is to further expand the base of international investors and fully enhance the company's value. However, details such as the listing exchange, timing, and issuance size have not been finalized yet.