SK Hynix Prices ADR IPO at $149, Raises $26.57 Billion in Record US Listing by Foreign Issuer

SK Hynix prices ADR IPO at $149 a share

First US IPO to achieve premium pricing

Tops Alibaba for biggest US listing by a foreign company

Nasdaq debut starts July 10 under temporary ticker SKHYV

Regular trading under SKHY begins July 13

SK Hynix has set the offering price for its American depositary receipt, or ADR, initial public offering at $149 a share, securing roughly $26.57 billion for investment. The deal surpassed Alibaba Group Holding Ltd.’s 2014 US listing to become the largest capital raise ever by a foreign company in the US market, setting a new milestone for South Korea’s capital markets. The chipmaker is preparing to step up spending for the race to lead the memory market in the artificial intelligence era. Construction of its Yongin semiconductor cluster and advanced packaging plants is also set to accelerate.

SK Hynix said in a filing on July 10 that it fixed the ADR offering price at $149 per share. One ADR represents one-tenth of a Korean common share. The company is selling 177.9 million ADRs, equivalent to 17.79 million common shares, and will raise a total of $26.571 billion from the offering.

That exceeds the $25 billion Alibaba raised in its 2014 US market debut, making it the largest US listing on record by a foreign company. Including US issuers, it ranks as the second-largest, behind SpaceX’s recent $85.7 billion listing. The total was still below the roughly $29 billion Wall Street had initially projected. SK Hynix said the transaction was the only IPO to achieve premium pricing.

The company plans to use the proceeds for capital spending, including construction of the first fab at the Yongin semiconductor cluster, construction of the P&T7 advanced packaging fab in Cheongju, and equipment purchases including extreme ultraviolet, or EUV, lithography tools. Once the offering closes on July 14 and the funds are paid in, investment to expand production capacity will begin in earnest.

The sale drew strong demand despite recent concerns over a slowdown in the memory-chip market. Bloomberg and Reuters reported that institutional bookbuilding attracted orders for more than seven times the shares on offer, and the final price was set above the ADR-equivalent price of the stock in Seoul. Industry officials attributed the response to global investors’ favorable view of the company’s competitiveness in high-bandwidth memory, or HBM, for AI applications and its long-term growth prospects.

SK Hynix will begin ADR trading on Nasdaq on July 10. SK Group Chairman Chey Tae-won and SK Hynix Chief Executive Officer Kwak Noh-jung are scheduled to attend the Nasdaq listing ceremony in New York.

After the event, Chey is set to take part in a live interview with Daniel Newman, chief executive officer of the Futurum Group and a global technology industry analyst, in an effort to engage with global investors. The discussion is expected to cover shifts in the memory-chip market in the AI era, competition in AI memory centered on HBM, and the market outlook as AI infrastructure expands.

The ADRs will begin conditional trading under the ticker SKHYV on July 10. Regular trading under the symbol SKHY will start on July 13. The offering process is scheduled to conclude on July 14. Bank of America, Citigroup, Goldman Sachs Group Inc. and JPMorgan Chase & Co. are serving as lead underwriters.

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