SK Hynix Seeks $33 Billion US ADR Sale as Kioxia Joins Push, Fueling Samsung Talk

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Memory capital race: SK Hynix and Kioxia head to US markets. What about Samsung?

SK Hynix targets $33 billion fundraising

Kioxia, up 800%, also plans ADR issuance

Korean and Japanese memory makers step up push into US capital markets

South Korean and Japanese memory-chip makers are moving in quick succession to tap US capital markets. SK Hynix is pursuing an American depositary receipt, or ADR, sale worth about $33 billion, and Kioxia, Japan’s largest NAND flash maker, is also preparing a US ADR issuance. In the brokerage industry, attention is also turning to whether Samsung Electronics will consider a US ADR listing.

According to industry officials on June 27, Kioxia Chief Financial Officer Yoshihiko Kawamura told shareholders at a June 25 meeting that the company aims to issue ADRs in the April-to-June period, when its next fiscal year begins. He called the plan a highly meaningful project that would connect Kioxia directly to the US market and said the company intends to make it a success. Such access would help stabilize the share price and allow Kioxia to raise funds directly in the US, he said.

An ADR allows companies based outside the US to make their shares available to American investors without directly listing on a US exchange. Kioxia’s move, coming a day after SK Hynix unveiled its own US listing plan, highlights a broader push by global memory makers to court investors in the world’s largest capital market.

Kioxia’s core product is NAND flash memory. NAND is less central than high-bandwidth memory, or HBM, which is used directly in artificial intelligence computing, but demand is climbing as larger AI models require far more data storage. Tight HBM supply is also spreading demand to NAND-based storage devices for data centers, supporting Kioxia’s earnings recovery.

Kioxia has emerged this year as one of Japan’s standout stocks on the back of booming AI-related memory demand. Its shares rose as much as 15% intraday on June 27, taking their gain this year to about 800%. The company also climbed to No. 1 by market capitalization among Japanese listed companies this year, surpassing Toyota Motor at one point. Chief Executive Officer Hiroo Ota said long-term supply contracts with major US cloud companies are increasing and memory demand will keep growing.

Kioxia is also a company backed by SK Hynix. In 2018, SK Hynix joined a South Korea-US-Japan consortium led by Bain Capital and invested 3.91 trillion won, equivalent to about $2.9 billion, indirectly securing roughly a 21% stake in Kioxia.

Before Kioxia’s announcement, SK Hynix said it would seek about $33 billion in US capital markets through an ADR offering. The company disclosed after a board meeting on June 24 that it had approved a third-party allotment capital increase of up to 17.79 million common shares. The issue price is 255,500 won per DR, based on the June 23 closing price of 2.555 million won for common stock. Total expected proceeds amount to about 45.4534 trillion won, or roughly $33.1 billion.

The company plans to list on Nasdaq on July 10. Under the structure, newly issued common shares will be placed with overseas institutions, deposited as the underlying stock and used to issue US depositary receipts for allocation to foreign institutional investors. Final proceeds and the offering price will be determined through bookbuilding with overseas institutional investors.

All of the money raised will be used for capital investment. SK Hynix said the funds will be concentrated on key production bases needed to maintain leadership in next-generation AI memory. Major spending targets include construction of the first fab at the Yongin semiconductor cluster, construction and equipment for the Cheongju P&T7 advanced packaging fab, and purchases of extreme ultraviolet, or EUV, scanners for next-generation processes.

By project, SK Hynix has earmarked 31.196 trillion won, or about $22.7 billion, for the first fab at the Yongin cluster and 19 trillion won, or about $13.8 billion, for the Cheongju P&T7 advanced packaging fab. It has also allocated 11.9497 trillion won, or roughly $8.7 billion, to secure EUV scanners, a key tool for next-generation fine processes. The company plans to use ADR proceeds as a core funding source for those investments and cover any shortfall with operating cash flow and borrowing.

As South Korean and Japanese memory makers knock on the door of US capital markets, brokerages are also weighing the possibility of a Samsung Electronics ADR listing. In a June 25 report, KB Securities Head of Research Kim Dong-won wrote that interest and inquiries from overseas investors about a potential US ADR listing for Samsung Electronics had far exceeded expectations in recent meetings. Many of those investors viewed such a move as a powerful catalyst for Samsung’s share price, he wrote.

Kim wrote that a US ADR listing is being evaluated as a viable capital-policy option to broaden access for global investors and that related discussion is likely to increase. Given Samsung’s current undervaluation and favorable market conditions, he added, a US ADR listing is difficult to rule out.

Kang Kyung-ju, Hankyung.com reporter qurasoha@hankyung.com