SK Hynix to give US investors bigger bite of the memory pie, as shortages persist

SK Hynix will debut on the Nasdaq on Friday with a $28 billion IPO, the largest foreign listing in history, as the memory chip maker seeks to expand capacity amid a global shortage driven by AI demand. The offering gives US investors easier access to the South Korean company, which holds 56.4% of the high-bandwidth memory market.

SK Hynix will make its US public trading debut on the Nasdaq on Friday. The initial public offering IPO consists of 177.9 million American Depositary Shares ADS , each representing one-tenth of a share of the company's common stock, that will trade under the ticker symbol SKHY https://finance.yahoo.com/quote/SKHY/ . All totaled, SK Hynix is hoping to raise $28 billion via the share sale, the largest such foreign listing in history, as it seeks to build up its manufacturing capacity to keep up with the incredible need for memory and storage chips driven by the global AI build-out. The debut also gives US investors an easier way to get in on the South Korean memory stock bonanza. The company's Korea-listed stock, which trades on the Korea Exchange, has skyrocketed 174% over the past 6 months and 636% in the past year. Though, as Yahoo Finance's Jared Blikre points out, https://finance.yahoo.com/markets/article/micron-samsung-sk-hynix-just-dragged-memory-stocks-into-a-bear-market-154549356.html memory stocks fell into a bear market on Tuesday. Memory makers are flying high thanks to the seemingly insatiable demand for high-bandwidth memory HBM and storage chips, which has created a global shortage that is impacting everything from data center builders to the consumer electronics industry. Data center servers require storage chips to save and access data needed to run AI models and processes. But AI chips, like Nvidia's NVDA https://finance.yahoo.com/quote/NVDA/ graphics processing units GPUs , don't need to access every bit of program or AI model all the time. Doing so would make them slow and inefficient. It'd be like trying to remember everything that's happened in your life when someone asks what you did over the weekend. That's where HBM comes in. This specialized memory holds the most important data needed to run a piece of software, right next to the processor, enabling super-fast performance. There are three major companies that make HBM and storage: Micron MU https://finance.yahoo.com/quote/MU/ , Samsung 005930.KS https://finance.yahoo.com/quote/005930.KS/ , and SK Hynix. And according to SK Hynix's filing with the Securities & Exchange Commission, it's the latest producer of HBM, capturing 56.4% of the market. All three companies are Nvidia partners. But American investors have limited means to purchase shares of SK Hynix or Samsung via US markets. As it stands, that dearth of memory and storage chips could last into 2030. That's because standing up new manufacturing facilities takes years. But the memory industry is also prone to periods of booms and busts. "Let's not forget a few years back these memory makers were negative gross margins, not negative…net income, but negative gross margins," explained Patrick Moorhead, founder and CEO of Moor Insights & Strategy.