SK Hynix, the South Korean chipmaker worth $1 trillion, opened Friday at $170 a share on the Nasdaq and quickly rose higher – signaling investors are still eager for access to the AI trade, even after weeks of wild swings in tech and chip stocks.
As of 2:45 p.m. ET, its American depositary receipts were up nearly 20% to $18.61, after raising $26.5 billion in a blockbuster Wall Street offering – the largest-ever US share sale by a foreign company.
More than 52 million shares of SK Hynix had traded by noon, “a huge number” less than 30 minutes after its debut, JJ Kinahan, head of retail expansion and alternative investment products at Cboe Global Markets, told the Wall Street Journal.
“It’s an incredible story for this company,” he said. “Revenue tripled between 2022 and 2025, but the key question is whether it can continue this incredible pace of growth.”
The memory-chip maker – which is South Korea’s second-most valuable company, trailing only Samsung – traded under the ticker symbol SKHYV, and will switch to SKHY as of Tuesday.
Its listing comes a month after Elon Musk’s SpaceX debuted on the Nasdaq in the largest-ever IPO. Investors are anticipating more massive AI IPOs from OpenAI and Anthropic later this year or in early 2027.
SK Hynix specializes in high bandwidth memory, or HBM, chips that have a higher memory capacity than the typical RAM chips used in cell phones and laptops.
Tech giants have gone all-in on artificial intelligence, racing to build out power-hungry data centers. That boom in demand has caused shortages and sent costs soaring, resulting in blowout profits for manufacturers like SK Hynix, Samsung and Micron.
SK Hynix CEO Kwak Noh-Jung told Bloomberg Friday that he expects memory-chip shortages to persist beyond 2030, saying customers are signing long-term contracts with the manufacturer.
The company – which sells to some of the biggest names in the industry, like Nvidia and Apple – has seen its valuation jump more than sevenfold over the past year.
Tech and chips stocks have suffered choppy trading, however, as American investors grow fearful that massive spending on AI infrastructure could be creating an “AI bubble” similar to the “dot-com bubble” of the early 2000s.
If AI investments do not pay out as expected, the market would suddenly experience an oversupply and prices would nosedive, critics say.
SK Hynix Chairman Tae-won signaled the company is optimistic and doesn’t see any cause for concern.
“The demand is enormous, exponentially, so I don’t really see” signs that demand for HBM chips is shrinking, Chey told CNBC Friday.
Chey said when he meets with partners, everyone asks for more chips – and that when SK Hynix announced plans to double its capacity within five years, customers complained it wasn’t enough.
“All my customers said that, ‘Well, that’s not enough, man, and, well, we need more,’” he said.
The company’s ADRs were priced at $149 in its share sale, and it plans to use the $26.5 billion raised on new factories and equipment.
It has announced a $4 billion packaging plant in Indiana, but the vast majority of its expansion plans will take place in South Korea.
Credit: Source link
