Chey Tae-won Secures 40 Trillion Won in Investment Firepower... SK hynix Begins First Trading on U.S. Nasdaq on the 10th Night

[Financial News] Chey Tae-won, chairman of SK Group, has secured nearly 40 trillion won in investment firepower through SK hynix's listing on the U.S. Nasdaq market via American Depositary Receipts (ADR). The company is expected to accelerate investment in the Yongin semiconductor cluster and purchases of high-end semiconductor equipment, while further strengthening its standing as a global semiconductor company.
According to SK hynix and the business community on the 10th, Chey is scheduled to attend the listing ceremony for SK hynix at the Nasdaq Stock Exchange in New York at around 10 p.m. on the 10th, along with key executives including CEO Kwak Noh-jung. He will also take part in the bell-ringing ceremony in person. Chey is expected to present a new future vision for SK hynix to mark the listing.
Trading in SK hynix shares will begin as soon as the Nasdaq market opens. The company issued up to 17.79 million new shares, or 177.9 million shares on an ADR basis, equivalent to about 2.5% of all outstanding shares. The ADR initial public offering price was set at $149 per share. Based on the exchange rate of 1,509.9 won per dollar on July 9, the pricing date, that comes to 224,975 won. Through this offering, SK hynix will raise a total of $26.571 billion, or 40,230,702,900,000 won. The proceeds will be deposited into SK hynix's account on the 14th, when the offering process is completed. The IPO size surpasses Alibaba Group's $25 billion U.S. stock market listing in 2014, making it the largest U.S. IPO ever by a foreign company. In terms of U.S. IPOs, it is second only to SpaceX, which listed last month with $85.7 billion.

According to the securities filing, SK hynix said it will invest the funds in three areas: the first fab of the Yongin Semiconductor Cluster; construction of the P&T7 advanced semiconductor packaging plant in Cheongju, a back-end facility dedicated to HBM; and the acquisition of advanced semiconductor equipment, including Extreme Ultraviolet Lithography (EUV) scanners. The EUV lithography equipment, which requires an investment of 1.19 trillion won, is expected to be introduced by next year. The total investment cost for these projects alone is about 61.9 trillion won.
Of course, this is only part of the semiconductor fab investment SK hynix is currently planning. The company estimates that investment in the Yongin Semiconductor Cluster alone, where a total of four semiconductor fabs will be built, will reach 600 trillion won. The final completion of the fourth and last fab in the cluster is now expected around 2033, 12 years earlier than originally planned.

SK hynix plans to press ahead with investment despite concerns that semiconductor stocks may have peaked and are losing momentum. That is because the shortage of memory chips in the real market continues. Counterpoint Research recently said that the average operating margin of the world's top three memory makers — Samsung Electronics, SK hynix, and Micron — is expected to reach 75% to 80% in the second quarter of this year, adding that the boom driven by supply shortages is likely to continue at least through next year. Micron's recent decision to invest 1.4 trillion yen in Hiroshima, Japan, to build a production line for next-generation high-bandwidth memory (HBM) also appears to reflect the view that the AI era is still in its early stages.
SK hynix is expected to be revalued as a global company through its Nasdaq listing. Chey Tae-won previously said, "If we list in the United States, we will be exposed to global shareholders, including those in the United States, and become a more global company than we are now." In addition to securing 40 trillion won in listing proceeds, the company is expected to gain more favorable conditions for future global bond issuance and large-scale local investments. Analysts also say the listing brings it closer to its goal of reaching 100 trillion won in net cash, which would strengthen its financial soundness and allow it to invest more stably.
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