SK Hynix Sees Strong Demand for US Share Sale, Order Book Over 7 Times Covered

Investor demand for SK Hynix's planned U.S. share sale has exceeded the number of available shares by more than seven times ahead of final pricing, Reuters reported on Thursday, citing a person familiar with the matter. The heavy oversubscription signals strong market appetite for the company, a key supplier of advanced memory chips for the artificial intelligence industry.

Details of the Offering

The offering of American Depositary Receipts (ADRs) is intended to raise capital to fund the construction of new factories and the purchase of equipment. This expansion is aimed at meeting the surging global demand for AI-related hardware.

Underwriters are expected to issue pricing guidance after the South Korean stock market closes on Thursday. The allocation of shares to investors will be finalized later in the U.S. trading day, with the ADRs scheduled to begin trading on the Nasdaq Global Select Market on Friday.

Market Position and Context

The strong investor interest comes despite a recent pullback in global technology stocks. SK Hynix has established itself as a critical player in the AI supply chain, primarily as the leading supplier of high-bandwidth memory (HBM) chips to industry giant Nvidia Corp.

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HBM is an essential component for the powerful processors used in AI servers, placing SK Hynix at the center of the ongoing AI investment boom. The capital raised from the ADR sale is expected to help the company solidify this strategic position.

Stock Performance

In response to the news, shares of SK Hynix (KS:000660) closed up 6% in Seoul trading, significantly outperforming the broader KOSPI index, which gained 2.4%.

While the company's stock has declined roughly 25% over the past two weeks amid wider profit-taking in the tech sector, it remains up approximately 680% over the last 12 months, reflecting its pivotal role in the AI revolution.