It’s done it. DRAM, HBM and NAND chip fabber SK Hynix has announced its US share sale, aiming to raise up to $36 billion.
The US share listing news was first revealed in March, with a potential upside of $9.6 billion to $14 billion and an August availability date. Hynix has jumped that gun with an earlier listing date and greater upside.
It will make 17.79 million new shares available on the Nasdaq market as ADRs (American depositary receipts), with 10 ADRs representing 1 common share. A reference ADR price of 242,500 won was cited in a July 6 filing by SK Hynix, implying 2,425,000 won per share ($1,582.44). The final price will be set on July 9, and the share offer could be the second biggest one in the USA after SpaceX’ IPO which raised $85.7 billion in June.
Baillie Gifford Overseas and Situational Awareness Partners are reportedly interested in spending a combined $7 billion on these shares. SK Hynix will use cash raised by the share sale to build new chip fabrication plants and buy costly ASML extreme ultraviolet scanning equipment
SK Hynix and Samsung Electronics are leading a South Korean government AI semiconductor strategy initiative, planning to invest 800 trillion won ($520 billion) in building new fabs and it intends to build two new HBM fabs as well in Onyang and Cheonan, South Chungcheong
SK Hynix will spend 400 billion won ($260 billion) on new plants in south west Korea.The company will invest 100 trillion won ($65 billion) in a new NAND fab at an existing production site in Cheongju, North Chungcheong.
Micron is also expanding its chip production plants in the USA, Singapore, Taiwan, and Japan.
This increased semiconductor plant spending assumes that the massive, AI-inflated demand for HBM, DRAM and NAND will continue for some years, providing a memory demand super-cycle. If that comes to an end sooner rather than later, we will see a memory glut and price drops.
Korean companies SK Telecom, GS, and Naver will also spend a combined 550 trillion won ($360 billion) to build AI data centers with an 8.4 gigawatt total capacity, as party of South Korea’s AI ambitions.
Korea’s President Lee Jae Myung said: "The global AI race has become both an all-out war and a highly localized battle for strategic advantage… We will establish a dedicated task force within the Blue House to take full responsibility for these projects and ensure they are carried through to completion.”
The Blue House is the President’s official office.
Bootnote
It’s reported that Micron, Samsung, and SK Hynix are facing a US class-action lawsuit, filed in the U.S. District Court for the Northern District of California, alleging they have been colluding since 2022 to limit chip output and so raise prices. Conventional DRAM prices have risen by approximately 700 percent since 2022.