SK Hynix raised $26.5 billion through its initial public offering on the Nasdaq, establishing a new record for the largest foreign company IPO in U.S. history. The South Korean memory chipmaker sold 177.9 million American Depositary Receipts (ADRs) at $149 each. This offering surpassed Alibaba's 2014 IPO, which raised $25 billion. The deal ranks as the second-largest IPO in U.S. market history, following SpaceX's $85.7 billion offering.
The significant capital raised comes amid surging global demand for semiconductors, particularly those used in artificial intelligence applications. SK Hynix plans to use the proceeds to expand its production capacity, including funding the first fabrication plant at its Yongin semiconductor cluster and purchasing manufacturing equipment. The company also has plans for an advanced packaging plant in Cheongju, South Korea, and has earmarked funds for extreme ultraviolet lithography equipment.
Following the successful IPO, U.S. Commerce Secretary Howard Lutnick publicly urged SK Hynix and Samsung Electronics to build memory semiconductor production facilities in the United States. Lutnick made these remarks at a ceremony for Micron Technology, a U.S. competitor, in New York. He stated that the administration is actively discussing expansion plans with both companies. Lutnick emphasized the importance of strengthening America's semiconductor supply chain and protecting U.S. intellectual property.
SK Hynix has already committed to investing $3.87 billion in an advanced semiconductor packaging plant in Indiana. However, industry sources suggest that Washington desires full memory chip production, such as DRAM wafer fabrication, to be established in the U.S.. SK Group Chairman Chey Tae-won indicated that SK Hynix is open to further U.S. investment beyond its existing packaging facility. He stated that building a memory fabrication plant in the U.S. is possible if conditions such as sufficient power, water, skilled labor, and supply chain infrastructure are met. Chey also mentioned potential investments in AI data centers and related technologies in the United States.
The U.S. administration's push for domestic chip manufacturing is part of a broader strategy to increase the U.S. share of global semiconductor production. Micron Technology recently announced plans to increase its U.S. investment to $250 billion by 2035, aiming to produce 40 percent of its DRAM output domestically.
For Korean chipmakers like SK Hynix and Samsung, establishing fabrication plants in the U.S. presents challenges, including higher construction and labor costs, alongside concerns about the transfer of proprietary technology. These discussions occur as SK Hynix and Samsung have also announced substantial investment plans in South Korea, including a combined investment of approximately 800 trillion won ($532 billion) in the Honam region.
The company's ADRs traded up approximately 13% on their debut on the Nasdaq. Despite recent volatility in its South Korean-listed shares, SK Hynix's stock has seen significant gains over the past year. The strong market reception for the IPO suggests investor confidence in the AI memory market.