SK Hynix is accelerating its plan for a US listing, aiming to challenge the home-market advantage enjoyed by American peers like Micron Technology in the global capital markets. According to a report, the company has informed its underwriters for the American Depositary Receipt (ADR) listing that the target window for the offering is between June and July of this year. This timeline represents a significant acceleration compared to the previous vague statement about a listing "within the year," indicating the company is progressing at a faster-than-expected pace. The investment banking community anticipates the new share issuance could reach approximately $10 billion.
The direct market impact of this move is that once SK Hynix completes its ADR listing, it will provide global investors direct access to the world's largest supplier of High Bandwidth Memory (HBM). Furthermore, it is expected to help align the company's valuation closer to its US counterparts. Currently, SK Hynix's forward price-to-earnings ratio is only 3 to 4 times, significantly lower than Micron Technology's 8 times and Western Digital's 19 times.
The listing schedule has been expedited, and the underwriting team is already in place. SK Hynix has reportedly formed an underwriting team centered around US-based securities firms and has formally commenced preparation work. Last month, the company disclosed that it had confidentially submitted a Form F-1 registration statement to the US Securities and Exchange Commission (SEC) for the ADR offering, but at that time, no specific timeline was provided. The recent communication of the June-July target to underwriters is interpreted by the industry as a strong signal of the company's determination to swiftly complete its entry into the US capital market.
An investment banking source commented that even if the stock price declines, the ADR listing schedule is unlikely to change, emphasizing that the company's resolve to enter the US market is more critical than timing. Currently, SK Hynix's share price has surpassed 1.1 million won per share, closing at 1.136 million won on April 16, a record high. The company stated on the 16th that the target is a listing within the year, but final details regarding size, method, and timing are not yet confirmed. The final decision will depend on factors including SEC review progress, market conditions, and demand forecasts.
The pursuit of large-scale financing is driven by SK Hynix's substantial capital expenditure plans. In February, the company decided to invest 21.6 trillion won by the end of 2030 to advance the first-phase wafer fab construction at the Yongin Semiconductor Cluster in Gyeonggi Province. Including facility investments announced in July 2024, the total scale reaches 31 trillion won. The company has also set a long-term strategy to invest 600 trillion won in Yongin by 2050 to build four wafer fabs. Additionally, SK Hynix announced earlier this year plans to establish an AI solutions company in the US, with potential investment of up to $10 billion. Although the company's cash reserves were nearly 35 trillion won at the end of last year, these investment plans far exceed its internal funds.
Regarding financing instruments, the market had previously expected SK Hynix to proceed with the ADR listing based on treasury shares. However, in January, the company cancelled almost all of its 12.24 trillion won worth of treasury shares, retaining only a portion for employee incentives, making a new share issuance the only viable path. Consequently, the investment banking industry expects the offering size to be around $10 billion. Analysts note that if the issuance size were reduced due to concerns about diluting the controlling stake of parent company SK Square, it could negatively impact the listing's attractiveness. Attracting a sufficient number of institutional investors is seen as crucial to activating trading and driving a valuation re-rating.
Narrowing the valuation gap with US peers is a core driver behind SK Hynix's US listing strategy. Based on this year's earnings expectations, the securities industry estimates SK Hynix's forward P/E ratio at just 3-4 times, compared to 8 times for Micron Technology and 19 times for Western Digital. SK Group Chairman Chey Tae-won stated at the NVIDIA GTC conference in San Jose, California, in March that "by opening up to US and global shareholders, the company will be able to become a more global enterprise." To support the listing process, SK Hynix also plans to conduct roadshows for US investors. The company expects to further accelerate related work following the confirmation of its first-quarter earnings results.
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