Global investors oversubscribe SK Hynix ADR by over 7x

Global investors placed orders for more than seven times the shares available in SK Hynix’s upcoming American depositary receipt offering, equivalent to 17.79 million common shares. The company plans to set the final price on Thursday and list the ADRs on the Nasdaq on July 10.

Around 1,000 institutional investors attended the chipmaker’s management roadshow, and U.S.-based investors submitted sizeable orders, with several in the hundreds of millions and some exceeding $1 billion. Baillie Gifford Overseas Limited, funds managed by Coatue Management and Situational Awareness Partners each indicated interest in buying portions of up to a combined $7 billion of the U.S. ADRs.

Each ADR represents one-tenth of a common share. The offering equals roughly 2.5% of SK Hynix’s market capitalisation and was valued at about $28 billion based on the company’s closing share price in Seoul last Friday. That target is smaller than an earlier plan to raise 45.453 trillion won.

Company filings show proceeds will be used to expand semiconductor manufacturing facilities in South Korea and to purchase advanced chipmaking equipment, including extreme ultraviolet lithography systems from ASML, to increase production capacity for high-bandwidth memory chips.

Demand for high-bandwidth memory chips has risen with growth in AI infrastructure. SK Hynix has invested in the technology for more than a decade and has become a leading supplier of HBM to major AI server makers.

The company’s market value has more than tripled this year as demand for AI-related memory surged. Shares have fallen about 25% over the past two weeks following a steep rally but remain up roughly 680% over the past year.

Meritz Securities analyst Kim Sun-woo wrote that the Nasdaq ADR listing would help narrow SK Hynix’s valuation gap with U.S. rival Micron Technology and could support inclusion in the Philadelphia Semiconductor Index, which may draw demand from exchange-traded funds and passive investors. Meritz also expects SK Hynix to continue generating strong earnings supported by persistent AI memory demand and constrained industry supply as production capacity expands through the year. HSBC applied a 20% premium to its prior price-to-book multiple, raising it from 2.8 to 3.4, describing the higher valuation as “more proactive shareholder-friendly initiatives and improved accessibility to global investors.”