Washington DC [US], July 11: Demand for SK Hynix's $28 billion US share sale was more than seven times available shares, a person familiar with the matter said, underscoring huge investor appetite for a pivotal company in the AI supply chain. The offering from the South Korean chipmaker, which will finance new factories and equipment to meet surging AI chip demand, is set to be the world's second-biggest share sale after SpaceX's record-breaking $85.7 billion IPO last month.
SK Hynix declined to comment. The person declined to be identified as details of the share sale were confidential. In addition to bringing in funds, SK Hynix's US listing is expected to help it narrow its valuation gap with US rival Micron, which, despite having less market share in key memory products, has benefited from direct access to the world's largest pool of investors. Micron currently trades at a 12-month forward price-to-earnings ratio of 6.66 times versus SK Hynix's 5.5 times.
SK Hynix has made its fortune by becoming the most sought-after supplier of high-bandwidth memory (HBM) chips, a culmination of 14 years of bets that brought it skepticism and scorn but ultimately put it at the centre of the global AI gold rush. "As long as there is demand for graphic processors and AI data centers, SK Hynix is indispensable," said Yoo Hoi-jun, an electrical engineering professor at the Korea Advanced Institute of Science & Technology.
Nvidia CEO said last month that SK Hynix would continue to be the US AI chipmaker's largest partner, adding that the current memory chip shortage would persist for a few years due to strong demand. Though shares in semiconductor companies globally have lost momentum in recent weeks, firms like SK Hynix and rival Samsung Electronics are sitting on historic gains.
Source: Qatar Tribune
