In a sharp turnaround, the South Korean won strengthened after an internal government source indicated officials were preparing for potential foreign exchange flows linked to memory chip giant SK hynix Inc's planned US depositary receipt (ADR) listing. By the close of trading on Friday, the benchmark KOSPI Composite Index surged nearly 6%, powered by robust rebounds in shares of the two leading memory chip makers, SK hynix and Samsung Electronics Co Ltd. The market and the currency staged a powerful recovery, moving swiftly from the previous day's steep declines to a strong bullish close.
The source, who requested anonymity due to the confidential nature of the matter, stated that the memory chip manufacturer is expected to begin using forward contracts as soon as Friday to hedge the currency flows from its upcoming US ADR listing, which is set to settle on July 14. The listing could raise over $29 billion. Although the ADRs are denominated in US dollars, SK hynix has indicated plans to repatriate a portion of the proceeds to South Korea for domestic investment, necessitating a large-scale purchase of the Korean won.
This week, SK hynix filed an amended F-1 registration statement with the US Securities and Exchange Commission (SEC) for its proposed listing on the Nasdaq stock exchange under the ticker "SKHY". The company is actively seeking to raise 45.45 trillion won ($29.4 billion) by tapping into robust global investor demand for shares of the high-flying and scarce memory chip leaders.
SK hynix's US listing plan, coupled with the exceptionally strong earnings and outlook recently reported by US memory chip giant Micron Technology, underscores that the memory chip super-cycle is far from over. While Micron validates the genuine strength of end-demand, SK hynix validates the intense capital market enthusiasm, highlighting investors' continued willingness to pay a premium for exposure to the memory chip supply bottleneck.
Catalysts Behind the Surge
The rare synchronized rebound in the won and shares of SK hynix and Samsung stems from a confluence of three factors: foreign exchange flows, strong AI memory fundamentals, and the persistent valuation discount in the South Korean stock market. On the currency front, the planned ADR listing aims to raise approximately $29.4 billion, with funds earmarked for capital expenditures on domestic wafer fabs, equipment procurement, and EUV lithography machines in South Korea. If a portion of these dollar proceeds is converted into won, it would increase US dollar supply in the Seoul forex market and alleviate depreciation pressure on the Korean currency.
In the equity market, SK hynix shares closed at 2,425,000 won on Friday, up about 10.88% from the previous close of 2,187,000 won, after hitting an intraday high of 2,454,000 won. Samsung Electronics shares closed at 309,500 won, an 8.22% increase from 286,000 won, reaching an intraday peak of 313,000 won. Friday's powerful rally in South Korean stocks highlighted a swift return to solid fundamentals following the panic selling triggered earlier in the week by concerns over AI compute oversupply. The massive construction of AI server clusters requires near-endless supplies of HBM, server DRAM, and enterprise SSDs, with the two Korean memory giants positioned as the primary global beneficiaries of this AI storage demand.
"The South Korean government appears to be closely monitoring exchange rate stability, so I think the company may cooperate by bringing dollars into the country to aid that stability," said Park Sang-hyun, an economist at iM Securities Co. He added, however, that the exact amount to be converted ultimately depends on SK hynix. "In terms of scale, it is certainly significant. The $29 billion figure is roughly equivalent to nearly one month of net foreign selling."
The won surged as much as 1% on Friday to 1,530.50 per US dollar, after having fallen as much as 0.7% earlier. Despite the significant rebound, the won remains one of the worst-performing Asian currencies this year, having depreciated over 5% and trading near its lowest levels in nearly two decades prior to Friday's move. According to Korea Exchange data, foreign investors were net sellers of KOSPI-listed stocks to the tune of approximately $30.5 billion last month, driven by the won's persistent weakness.
A spokesperson for SK hynix stated in a declaration that the company is considering various options but did not confirm specifics. SK hynix is capitalizing on exceptionally strong demand from Wall Street and global institutional investors for memory chip stocks, whose prices have soared since the second half of 2025, and has announced plans to accelerate domestic memory chip capacity expansion and construction projects. An investment inflow of this scale converting dollars to won would provide a rare source of support for the beleaguered Korean currency.
Industry Fundamentals Provide Support
The ongoing memory price upcycle provides an industrial "earnings anchor" for this stock and currency rebound. TrendForce estimates that traditional DRAM contract prices will rise 58–63% quarter-on-quarter in Q2 2026, while NAND Flash contract prices are projected to increase 70–75%. The firm notes that North American cloud service providers are accelerating AI inference deployments, driving demand for AI servers, general-purpose servers, high-capacity RDIMMs, and enterprise SSDs. Suppliers continue to shift capacity towards HBM, server DRAM, and enterprise SSDs, keeping overall supply tight.
As a core supplier of high-bandwidth memory (HBM) for AI systems from companies like NVIDIA and Google, if SK hynix achieves valuation multiples in the US market comparable to peers like Micron, its domestic Korean shares could also be revalued upwards. From an engineering perspective, HBM is no longer an ordinary memory component but a key constraint determining the throughput, power efficiency, and inference concurrency of GPU/ASIC clusters. By using US market financing to lock in advanced packaging and EUV capacity in Yongin and Cheongju, SK hynix is essentially securing "memory bandwidth supply rights" in an era of AI compute shortage.
A Goldman Sachs DRAM survey in June revealed that HBM pricing power is being re-anchored by tightness in traditional DRAM. Spot prices for DDR5 have risen 20% since May 1, trading at a 25% premium to May contract prices, while DDR4 prices have increased 11% with a premium as high as 45%. This indicates the spot market is significantly leading the contract market, suggesting further upward pressure on future contract prices. More critically, Goldman Sachs sharply raised its 2027 HBM price growth forecast for Samsung from +14% to +44%, noting that with tight HBM supply-demand and a widening price gap between traditional DRAM and HBM, risks remain skewed to the upside.
Landmark Listing and AI Infrastructure Boom
Depending on the exchange rate, the proposed size of SK hynix's US ADR issuance would rank among the top three initial equity offerings in global stock market history. According to compiled data, it would be comparable to Saudi Aramco's $29.4 billion mega-IPO in 2019, with SpaceX's fundraising of at least $75 billion holding the top spot. Whether it's Google's massive TPU AI compute clusters or NVIDIA's enormous AI GPU clusters, all require fully integrated HBM memory systems alongside the AI chips. This demand is compounded by tech giants' accelerated construction and expansion of AI data centers, necessitating large-scale purchases of server-grade DDR5 memory and enterprise high-performance SSDs/HDDs. Samsung Electronics, SK hynix, and Micron Technology are strategically positioned across the three core storage segments: HBM, server-grade high-performance DRAM (including DDR5/LPDDR5X), and high-end data center SSDs, making them direct beneficiaries of the "AI memory and storage stack" and prime recipients of the "super红利" from the AI infrastructure wave.
This US listing plan marks a milestone in SK hynix's remarkable ascent. After becoming the preferred HBM supplier to NVIDIA, the dominant force in AI chips, it has emerged as the global market share leader in HBM systems. This has allowed it to surpass its long-time domestic rival, Samsung Electronics, in market capitalization and overall DRAM share at times.
Bullish Analyst Outlook
Nomura is currently among the most bullish large financial institutions on the memory chip sector. In a recent research report, it raised its price target for Samsung Electronics from 340,000 won to 590,000 won, and for SK hynix from 2.34 million won to 4 million won, implying potential upside of approximately 118% and 120%, respectively. Nomura's core bullish thesis is that AI has transformed memory from a traditional cyclical PC/mobile product into a long-term growth asset for data centers. AI agent inference requires massive key-value cache (KV Cache), with HBM supply lagging significantly behind demand. The firm forecasts global data center capital expenditure will grow from $1.16 trillion last year to $6.13 trillion by 2030, with memory's share of data center investment potentially rising from the current 9% to 23%. Consequently, the approximately 6x forward 12-month P/E ratios for Samsung and SK hynix are seen as significantly undervalued, with room for re-rating towards the ~20x valuation system of Taiwan Semiconductor Manufacturing Company.
Comments