The South Korean chip manufacturer has launched a global placement of 17.79 million new shares to raise between $28 billion and $29 billion. Institutional demand has been immediate, with funds such as Baillie Gifford and Coatue Management committing up to $7 billion.
SK Hynix has initiated the largest capital increase in its history. The South Korean semiconductor manufacturer launched a global placement of 17.79 million new shares in the form of American Depositary Receipts (ADR) on Monday, which will trade on Nasdaq under the ticker SKHY. The operation aims to raise between $28 billion and $29 billion, equivalent to about 43.14 trillion won. The reference price of the ADR was set at 242,500 won, with a ratio of ten ADRs for each ordinary share.
Institutional interest has been immediate. According to close sources, Baillie Gifford, Coatue Management, and Situational Awareness Partners—a firm founded by former OpenAI employees—have committed to subscribe up to $7 billion of the total offered. Demand far exceeds expectations, although recent volatility in the South Korean market forced a slight reduction in the initial target of $29.4 billion.
Record investment on four fronts
The funds raised will fuel a multi-year investment offensive. SK Hynix has budgeted 100 trillion won (about $64 billion) just for the Cheongju complex. Of that amount, 80 trillion will be allocated to the new M17 NAND flash memory factory, which is set to begin production in the first half of 2029. The remaining 20 trillion will finance the expansion of advanced packaging capabilities at the P&T7 plant, which is expected to be completed by the end of 2027.
This macro project is complemented by other key initiatives. The Yongin Semiconductor Cluster, a massive manufacturing hub in South Korea, will absorb a significant portion of the long-term capital. In the United States, the company will allocate $4 billion to a packaging facility in Indiana. Additionally, SK Hynix has ordered EUV lithography equipment from the Dutch company ASML worth 11.9 trillion won (approximately $7.8 billion), with deliveries set to begin in December 2027. The company currently controls 57% of the global HBM market, the type of memory used by AI systems from Nvidia and Google.
The market discounts dilution, but value remains attractive
The stock market reaction reflects the nervousness typical of dilution effects. On Monday, the stock closed at 2,343,000 won, a decline of 3.4% for the day and nearly 17% for the week. Since the 52-week high, reached at the end of June at nearly 3 million won, the stock has accumulated a drop of 21%. However, year-to-date, the gain stands at 246%, and the value has quadrupled since the 52-week low, which was at 491,500 won.
After the correction, the 14-day RSI is at 46, in neutral territory. The valuation, measured by the estimated P/E ratio of 6.6 to 7.4 times, remains lower than that of its competitor Micron, which some analysts consider an attractive entry point despite the capital increase. For investors interested in the sector, the key lies in whether the dilution is offset by the growth potential of HBM demand driven by artificial intelligence.
Test of fire with Samsung and Morgan Stanley's warning
The debut on Nasdaq is scheduled for Friday, July 10. Before that, this Tuesday, Samsung Electronics will publish its preliminary results for the second quarter. Market consensus points to an operating profit of around 86 trillion won, a figure that will serve as a barometer for the entire sector in South Korea and, by extension, for the reception of SK Hynix's IPO on Wall Street.
The macro context is not unanimous. Morgan Stanley recently warned of a potential slowdown in the semiconductor cycle. Other observers, however, see the current memory shortage—dubbed RAMageddon—as proof that the AI supercycle remains intact. The success of the placement and the performance of the ADRs in their first week of trading will determine whether the market supports SK Hynix's multimillion-dollar bet to continue dominating the memory of the future. For investors, the practical recommendation is to closely monitor the ADR's pricing starting Friday and compare the evolution with Samsung's results, which will set the tone for the sector.
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