SK Hynix $28B U.S. Share Sale Fuels AI Expansion

South Korean chipmaker SK Hynix on Monday launched a U.S. share sale aimed at raising 43 trillion won ($28.07 billion) as it seeks to capitalize on strong investor interest in artificial intelligence. The company has received indications of interest totaling up to $7 billion from major investors.

SK Hynix said that Baillie Gifford Overseas, investment funds managed by Coatue Management and Situational Awareness Partners have each separately indicated interest in buying up to a combined $7 billion worth of SK Hynix’s American depositary receipts, or ADRs. The company will sell 17.79 million new shares through the ADRs on the Nasdaq, with a reference price of 242,500 won per ADR based on SK Hynix’s July 3 closing price in Seoul.

The share sale comes a week after SK Hynix’s market capitalization crossed the $1 trillion mark for the first time, placing it alongside rivals Samsung Electronics and Micron Technology in the trillion-dollar semiconductor club. SK Hynix is among various Asian chip companies tapping into strong global demand for AI-related stocks, with Taiwan’s Unimicron Technology also seeking to raise about $1.4 billion through a sale of global depositary shares.

Memory chip stocks have been volatile in recent months as investors question whether the AI boom can be sustained. Analysts at Capital Economics said big swings were especially worrisome, noting that such selloffs have previously occurred during bear markets like the Asian financial crisis, the dot-com bubble, and the Great Financial Crisis. “This volatility is, in our view, evidence of excessive froth and calls into question the sustainability of this rally,” wrote James Reilly, a senior markets economist.

Di Zhou, portfolio manager at Thornburg Investment Management, which owns SK Hynix’s Korean ordinary shares, said the ADR listing was positive because it would broaden the company’s investor base and potentially narrow its valuation gap with U.S. rival Micron. “We are in the midst of a memory super cycle, with all three major suppliers riding the AI-driven demand wave,” she said.