Fundraising exceeds Alibaba, stock price rises nearly 13%: SK Hynix IPO carnival and hidden worries
SK Hynix landed on Nasdaq with a financing scale of US$26.5 billion, breaking Alibaba's U.S. IPO record that had been maintained for more than ten years. It recorded double-digit gains on the first day of trading, which further demonstrated the market's enthusiastic pursuit of the AI storage track.
SK Hynix landed on Nasdaq with a financing scale of US$26.5 billion, breaking Alibaba's U.S. IPO record that had been maintained for more than ten years. It recorded double-digit gains on the first day of trading, which further demonstrated the market's enthusiastic pursuit of the AI storage track. On July 10, Eastern Time, SK Hynix was listed on Nasdaq under the American Depositary Receipt (ADR) code SKHYV. The opening price on the first day of listing was US$170, an increase of approximately 14.1% from the issue price of US$149. It once touched US$177 during the session, and the increase expanded to approximately 18.8%. It closed at US$168.01, up approximately 12.8% during the day. Based on the closing price, the company's market capitalization was US$1.22 trillion. According to the news, SK Hynix’s U.S. IPO was oversubscribed by more than seven times. The 177.9 million American Depositary Receipts (ADRs) issued this time attracted global long-term funds, funds focusing on the technology field, sovereign wealth funds, and global investors focusing on the Asian market to participate in the subscription. SK Hynix has a clear direction for this listing. The funds raised from its listing will be focused on the construction of Yongin Semiconductor Cluster Fab, the expansion of advanced packaging facilities in Cheongju, and the construction of an AI memory packaging factory in Indiana, USA. In addition, SK Hynix will also purchase EUV lithography equipment to expand HBM's high-bandwidth memory production capacity to meet the rapidly growing demand for memory performance of artificial intelligence chips. Recently, global memory chip giants have launched capital operations. Although the momentum of the chip sector has slowed down after the early surge, manufacturers still hope to seize the opportunity in the storage upcycle. Therefore, SK Hynix’s listing is seen as a key litmus test for investors’ confidence in the durability of the AI boom. Hynix sets record for listing While the global memory chip sector continues to fluctuate, SK Hynix has completed its listing in the United States in an almost perfect manner. This time, SK Hynix raised US$26.5 billion through the issuance of American depositary receipts, a large part of which will be used to expand chip manufacturing capacity. It's a move that the industry as a whole has avoided for years as it has been hit hard by oversupply in the past. However, SK Hynix believes that the cyclicality of memory chips has changed. SK Group Chairman Choi Tae-won said that "storage demand will grow exponentially in the future" and hinted that if the company can achieve strong enough returns and attract more investors, it will not rule out the possibility of further issuance of U.S. stocks. He also revealed that SK Hynix is considering launching a "memory as a service" business model that allows customers to rent storage resources instead of purchasing chips directly to solve the AI-related memory capacity bottleneck. “The market debate on whether the AI market has peaked continues to heat up, but I believe that the fundamental motivation for SK Hynix’s listing in the United States is not to cater to short-term sentiment, but to take advantage of the current high point of earnings and market sentiment to exchange scarce HBM valuations for permanent capital, thereby achieving an effective match of capital terms. "Li Huihui, a professor of management practice at Lyon Business School in France, told the 21st Century Business Herald reporter that after entering the HBM4 technology node, R&D, tape-out, advanced packaging and customer customization need to be promoted simultaneously, and front-end investment is significantly increased. Although the asset duration is extended, the window period for product iteration tends to be narrowed. If we continue to rely heavily on debt financing instruments, our balance sheets will become passive during the next downturn in the storage cycle. Li Huihui believes that SK Hynix’s choice of IPO in the United States is actually striving for a lower cost of equity capital and completing re-pricing to an “AI core infrastructure supplier” in the core area of global capital. At the same time, by issuing American Depository Receipts (ADRs), the company is able to establish US dollar-denominated equity capital. In the future, whether it is expanding production in the United States, conducting cross-border mergers and acquisitions, or introducing top talents, its payment methods will be more flexible. In the final analysis, SK Hynix’s listing this time is to take advantage of the depth and liquidity of the US stock market to lay out in advance and seize the opportunity for long-term strategic competition.
It is worth noting that in recent years, SK Hynix has significantly deepened its ties with the US AI and semiconductor ecosystem. When asked whether SK Hynix would consider bringing its memory chip manufacturing business to the United States, SK Hynix CEO Guo Luzheng said he would not rule out the possibility. But he said any factory site must meet the company's requirements, including power supply, water conditions and talent pool. Tanya, deputy director of the BRICS Research Center at the University of International Business and Economics, told the 21st Century Business Herald reporter that SK Hynix is an important HBM supplier to Nvidia, and in addition to promoting advanced packaging investment in Indiana, the United States, its listing in the United States will help further strengthen its position in the U.S.-led AI supply chain and improve its stickiness with U.S. customers, capital markets and industrial policy systems. She further said that there is a high probability that this listing will help SK Hynix consolidate its HBM advantage in the short and medium term, but whether it can maintain its lead in the long term also depends on the speed of technology iteration, customer concentration risk control, and whether AI demand can continue to absorb new production capacity. Risks Behind the Storage Cycle Boom As storage enters a historic cycle, storage giants such as SK Hynix are making a lot of money. In April this year, SK Hynix announced its first quarter financial report for fiscal year 2026, in which operating income in the first quarter was 52.5763 trillion won and net profit was 40.3459 trillion won. Its first-quarter operating profit margin was 72% and net profit margin was 77%. Using data from the first quarter of fiscal year 2026 as a reference, SK Hynix's gross profit margin and operating profit margin are higher than NVIDIA's. NVIDIA's gross profit margin during the same period was 74.9%, while its operating profit margin was 65.6%. Despite its impressive financial results, SK Hynix's share price still cannot escape violent fluctuations. Currently, SK Hynix’s share price on the South Korean stock market has fallen by a quarter from the historical high hit two weeks ago. However, the short-term fluctuations in the stock price have not hindered the market's pursuit of SK hynix at all. According to the closing price on July 10, SK Hynix in the Korean market closed at 2.18 million won, which is equivalent to a US stock market price of US$145.15/ADR. Based on this calculation, SK Hynix ADR has a premium of 21.68% over South Korea’s underlying stocks. The market is paying attention to whether SK Hynix's 21% ultra-high premium can be sustained in the short term. In addition, how HBM's industry cycle will determine the stock's mid- to long-term valuation center. Tanya believes that the large amount of financing currently obtained by SK Hynix and the high premium in the US stock market need to be viewed dialectically. She said that this more reflects the market's expectations of its future growth capabilities, rather than that its future competitive advantage has been guaranteed. "The current valuation is largely based on the continued high growth of AI infrastructure investment, continued strong demand for HBM, and SK Hynix's maintenance of technology leadership; once the growth rate of AI investment slows down, or Samsung and Micron accelerate their catch-up, new production capacity may also bring pressure on prices and profitability." Tanya analyzed that this financing is indeed a recognition of SK Hynix's actual competitiveness, but it also means that the market has put forward higher requirements for future growth. Li Huihui believes that the reason why SK Hynix shares traded in the U.S. market are at a premium compared to Korean common stocks may include a number of non-product-level factors such as the U.S.-Korea exchange rate window, convenience of U.S. stock trading, and scarcity of allotments. As for the fundraising scale surpassing Alibaba's record, what is more noteworthy is not the record itself, but the profound shift in capital preferences behind it: more than ten years ago, funds chased platform traffic; today, capital begins to price in advance physical bottlenecks such as advanced manufacturing, energy, computing power, and storage capacity. In his view, real competitiveness has never been about the amount of financing, but whether this capital can continue to create returns higher than the cost of capital. Although storage giants such as SK Hynix are in their prime moment, market doubts have never dissipated. Over the past few decades, industry cycles have repeatedly proven that in every boom cycle, industry manufacturers ultimately cannot escape the fate of large-scale production expansion. As new production capacity is gradually released, will this round of AI-driven prosperity push the industry into a new round of reshuffle?
"Risks exist objectively, but the biggest concern is not the sudden ebb of AI demand, but the 'term mismatch' at the bottom of the supply chain." Li Huihui analyzed that the current order visibility of the four major cloud vendors in North America is far less than the asset life of wafer fabs and packaging plants. Once downstream demand slows down, huge depreciation costs will not stop simultaneously. At the same time, the issue of customer concentration cannot be ignored - the deeper the customized binding, the easier it is for the bargaining power to be tilted towards a few large buyers. Storage companies are most afraid of looking at forward P/E ratios at the peak of profits. Once profits fall, valuations will quickly come under pressure. Tanya holds a similar view. SK Hynix still faces the risk of a strong memory chip cycle and a possible cooling of AI investment. If large technology companies reduce data center capital expenditures, HBM demand is lower than expected, or Samsung and Micron accelerate their catch-up, its profits and valuations may be under pressure. The U.S. capital market is more aggressive in pricing the concept of AI, but it is also more sensitive. Technology stocks have high valuations and concentrated capital transactions. Once the market re-evaluates the return on AI investment, U.S. stocks may experience severe valuation compression and stock price fluctuations. After listing in the United States, SK Hynix may face more stringent information disclosure, regulatory compliance and potential litigation costs, and be more directly exposed to the risks of changes in U.S. interest rates, global capital risk appetite and geopolitical policy adjustments. But now, the underlying logic of the storage industry has undergone fundamental changes. Previously, the demand for memory chips was anchored by terminal electronic products. In the AI era, driven by the continued expansion of investment in AI infrastructure, memory chips have transformed into indispensable "digital oil", which means that the cyclicality of memory chips has been greatly weakened. Because of this, SK Hynix’s listing in the United States is highly favored by the market. "SK Hynix's listing in the United States this time is equivalent to using its abundant US dollar equity to buy itself a ticket through the inventory cycle, ensuring that it can always stay at the core stage of the technology industry." Li Huihui said. (
It is worth noting that in recent years, SK Hynix has significantly deepened its ties with the US AI and semiconductor ecosystem. When asked whether SK Hynix would consider bringing its memory chip manufacturing business to the United States, SK Hynix CEO Guo Luzheng said he would not rule out the possibility. But he said any factory site must meet the company's requirements, including power supply, water conditions and talent pool. Tanya, deputy director of the BRICS Research Center at the University of International Business and Economics, told the 21st Century Business Herald reporter that SK Hynix is an important HBM supplier to Nvidia, and in addition to promoting advanced packaging investment in Indiana, the United States, its listing in the United States will help further strengthen its position in the U.S.-led AI supply chain and improve its stickiness with U.S. customers, capital markets and industrial policy systems. She further said that there is a high probability that this listing will help SK Hynix consolidate its HBM advantage in the short and medium term, but whether it can maintain its lead in the long term also depends on the speed of technology iteration, customer concentration risk control, and whether AI demand can continue to absorb new production capacity. Risks Behind the Storage Cycle Boom As storage enters a historic cycle, storage giants such as SK Hynix are making a lot of money. In April this year, SK Hynix announced its first quarter financial report for fiscal year 2026, in which operating income in the first quarter was 52.5763 trillion won and net profit was 40.3459 trillion won. Its first-quarter operating profit margin was 72% and net profit margin was 77%. Using data from the first quarter of fiscal year 2026 as a reference, SK Hynix's gross profit margin and operating profit margin are higher than NVIDIA's. NVIDIA's gross profit margin during the same period was 74.9%, while its operating profit margin was 65.6%. Despite its impressive financial results, SK Hynix's share price still cannot escape violent fluctuations. Currently, SK Hynix’s share price on the South Korean stock market has fallen by a quarter from the historical high hit two weeks ago. However, the short-term fluctuations in the stock price have not hindered the market's pursuit of SK hynix at all. According to the closing price on July 10, SK Hynix in the Korean market closed at 2.18 million won, which is equivalent to a US stock market price of US$145.15/ADR. Based on this calculation, SK Hynix ADR has a premium of 21.68% over South Korea’s underlying stocks. The market is paying attention to whether SK Hynix's 21% ultra-high premium can be sustained in the short term. In addition, how HBM's industry cycle will determine the stock's mid- to long-term valuation center. Tanya believes that the large amount of financing currently obtained by SK Hynix and the high premium in the US stock market need to be viewed dialectically. She said that this more reflects the market's expectations of its future growth capabilities, rather than that its future competitive advantage has been guaranteed. "The current valuation is largely based on the continued high growth of AI infrastructure investment, continued strong demand for HBM, and SK Hynix's maintenance of technology leadership; once the growth rate of AI investment slows down, or Samsung and Micron accelerate their catch-up, new production capacity may also bring pressure on prices and profitability." Tanya analyzed that this financing is indeed a recognition of SK Hynix's actual competitiveness, but it also means that the market has put forward higher requirements for future growth. Li Huihui believes that the reason why SK Hynix shares traded in the U.S. market are at a premium compared to Korean common stocks may include a number of non-product-level factors such as the U.S.-Korea exchange rate window, convenience of U.S. stock trading, and scarcity of allotments. As for the fundraising scale surpassing Alibaba's record, what is more noteworthy is not the record itself, but the profound shift in capital preferences behind it: more than ten years ago, funds chased platform traffic; today, capital begins to price in advance physical bottlenecks such as advanced manufacturing, energy, computing power, and storage capacity. In his view, real competitiveness has never been about the amount of financing, but whether this capital can continue to create returns higher than the cost of capital. Although storage giants such as SK Hynix are in their prime moment, market doubts have never dissipated. Over the past few decades, industry cycles have repeatedly proven that in every boom cycle, industry manufacturers ultimately cannot escape the fate of large-scale production expansion. As new production capacity is gradually released, will this round of AI-driven prosperity push the industry into a new round of reshuffle?
"Risks exist objectively, but the biggest concern is not the sudden ebb of AI demand, but the 'term mismatch' at the bottom of the supply chain." Li Huihui analyzed that the current order visibility of the four major cloud vendors in North America is far less than the asset life of wafer fabs and packaging plants. Once downstream demand slows down, huge depreciation costs will not stop simultaneously. At the same time, the issue of customer concentration cannot be ignored - the deeper the customized binding, the easier it is for the bargaining power to be tilted towards a few large buyers. Storage companies are most afraid of looking at forward P/E ratios at the peak of profits. Once profits fall, valuations will quickly come under pressure. Tanya holds a similar view. SK Hynix still faces the risk of a strong memory chip cycle and a possible cooling of AI investment. If large technology companies reduce data center capital expenditures, HBM demand is lower than expected, or Samsung and Micron accelerate their catch-up, its profits and valuations may be under pressure. The U.S. capital market is more aggressive in pricing the concept of AI, but it is also more sensitive. Technology stocks have high valuations and concentrated capital transactions. Once the market re-evaluates the return on AI investment, U.S. stocks may experience severe valuation compression and stock price fluctuations. After listing in the United States, SK Hynix may face more stringent information disclosure, regulatory compliance and potential litigation costs, and be more directly exposed to the risks of changes in U.S. interest rates, global capital risk appetite and geopolitical policy adjustments. But now, the underlying logic of the storage industry has undergone fundamental changes. Previously, the demand for memory chips was anchored by terminal electronic products. In the AI era, driven by the continued expansion of investment in AI infrastructure, memory chips have transformed into indispensable "digital oil", which means that the cyclicality of memory chips has been greatly weakened. Because of this, SK Hynix’s listing in the United States is highly favored by the market. "SK Hynix's listing in the United States this time is equivalent to using its abundant US dollar equity to buy itself a ticket through the inventory cycle, ensuring that it can always stay at the core stage of the technology industry." Li Huihui said. (