SK Hynix plans to sell nearly 17.8 million shares in a U.S. IPO, potentially raising $28 billion according to recent share prices. The company will offer American depositary receipts starting next Friday, allowing American investors to buy the stock without trading directly on a Seoul exchange. This move follows a massive surge in demand for memory chips driven by artificial intelligence systems. Hyper-scalers like Amazon, Microsoft, Google, and Oracle are building data centres that require vast amounts of high-bandwidth memory, creating a shortage known as RAMageddon. SK Hynix reported a 200% increase in first-quarter revenues compared to the same period last year. Its stock has risen about 260% this year as Wall Street searches for the next Nvidia.
The significance lies in the intense competition for limited supply among South Korean manufacturers. SK Hynix and Samsung have vowed to spend over $550 billion on new manufacturing capacity to meet AI needs. This heavy investment carries the risk that facilities will be built before the market demands shift, potentially leaving them with excess supply and crashing prices. For now, investors view these memory chipmakers as the closest options to the current market leader.
* Shares are expected to price on Thursday.
* One American depositary receipt represents a tenth of a common share.
* Apple executives say the shortage is forcing price hikes on Mac computers and iPads.
