SK Hynix lands on Nasdaq, betting on AI to break chip boom-and-bust cycle
South Korean memory chip manufacturer SK Hynix has just completed the largest listing of a foreign company in the United States in history, and it soared 13% on the first day of listing. The logic behind this historic listing is simple: Betting on the artificial intelligence boom has fundamentally reshaped the boom-and-bust cycles that have defined the memory chip industry for decades. SK Hynix raised $26.5 billion through the issuance of American depositary receipts (ADRs), a large portion of which will be used to expand chip manufacturing capacity - something the industry has been reluctant to do for years because of its history of suffering from oversupply. "We have always been a cyclical industry, so we have had ups and downs in the past," SK Hynix CEO Guo Luzheng said in an interview. But "things have clearly changed," he said. The advent of the ChatGPT era has led to a continued shortage of memory chip supply and affected all aspects of the supply chain, prompting price increases for products ranging from iPads to Xbox game consoles. Guo Luzheng said that now customers come to SK hynix to sign long-term supply agreements. "They believe the supply shortage will last longer," he said. He then predicted that this supply shortage may even continue beyond 2030. Data center investment plans with a scale of up to trillions of dollars, which rely on private placement credit, corporate bonds and other financial channels to raise funds, are also based on the same expectations. only Parent company Alphabet, , in the past five years, a total of approximately US$350 billion has been added in debt to purchase the hardware equipment needed to support its own AI strategy. AI bets drive the rapid expansion of leveraged ETFs, and the behemoth triggers violent fluctuations in global markets Of course, there are many people who are bearish. Some Wall Street tycoons, including "Big Short" Michael Burry and Bridgewater founder Ray Dalio, have warned that the AI bubble will eventually burst. After all, even the largest and most successful AI developers have yet to prove that their models and tools can be profitable. But at least for now, as the main beneficiaries of the AI investment frenzy, SK Hynix and other memory chip giants-Samsung Electronics and Technology – it’s all soaring. Due to this craze, demand has increased not only for traditional memory chips, but also for high-bandwidth memory (HBM), which is a new generation of products required by AI systems. SK Hynix CEO Guo Luzheng was interviewed in New York on Friday "I believe demand will grow and our supply capacity will never be able to keep up," SK Group Chairman Choi Tae-won said in an interview. Cui Taiyuan said that the supply and demand of memory chips may not return to normal until general artificial intelligence is realized. "Until then, we need a lot of memory," he said. SK Group owns a controlling stake in SK hynix.