SK hynix Raises Record $26.5B in US IPO to Expand HBM

Context and Details of the Record IPO

On July 10, 2025, SK hynix debuted on the Nasdaq under the temporary ticker SKHYV, selling 177.9 million American Depositary Receipts (ADRs) at $149 each, representing one-tenth of a share listed in Seoul. The offering was led by Bank of America, Citigroup, Goldman Sachs, and JPMorgan, with a syndicate of 13 banks. Demand from institutional investors such as Baillie Gifford, Coatue Management, and Situational Awareness Partners reached $7 billion, according to the Financial Times. More than 500 investment firms participated in the offering, which was oversubscribed more than seven times. This IPO surpasses Alibaba's in 2014 ($25 billion) and Saudi Aramco's in 2019 ($29.4 billion, though the latter listed primarily on the local exchange). The deal marks the largest IPO by a foreign company in US history, surpassing Alibaba's.

Strategic Importance of HBM and SK hynix's Expansion

SK hynix is the world's leading manufacturer of High-Bandwidth Memory (HBM), a vertically stacked DRAM essential for AI accelerators like those from NVIDIA. The company will allocate the funds to increase its HBM manufacturing capacity, including: the first phase of the factory in the Yongin semiconductor cluster (with a total projected investment of $90 billion for the entire complex), a new advanced packaging line P&T7 in Cheongju, and EUV lithography equipment to be delivered by the end of next year. Additionally, it is building its first US plant in West Lafayette, Indiana, with an investment of $4 billion, eligible for $458 million in CHIPS Act subsidies and $570 million in federal loans. This plant will focus on advanced 2.5D packaging for HBM, a critical step in the AI supply chain.

Financial and Market Impact

The South Korean company has experienced explosive growth: its stock in Seoul has risen 220% so far in 2025 and has multiplied sixfold over the past year. SK hynix is expected to report over 200 trillion won ($133 billion) in operating profit this year, a record that could allow bonuses of up to $400,000 per employee. The company briefly surpassed Samsung as South Korea's most valuable company in June 2025, with a market capitalization near $1.35 trillion. All of its HBM, DRAM, and NAND production for 2026 is already sold out, underscoring the insatiable demand for AI components. This phenomenon recalls the dot-com boom, but with stronger fundamentals: SK hynix generates real revenue and has long-term contracts with clients like NVIDIA. However, the valuation is high, with a price-to-earnings ratio exceeding 30 times, prompting caution among some analysts.

Implications for the Industry and Readers

This record IPO indicates that demand for AI infrastructure remains a dominant growth driver. For investors, it represents an opportunity for direct exposure to the AI boom, but with valuation risks and dependence on a single market. For the tech industry, SK hynix's expansion will alleviate HBM shortages, accelerating the development of more powerful AI models. However, the concentration of production in South Korea and reliance on US subsidies raise geopolitical questions. The CHIPS Act aims to reduce dependence on Asia, but the Indiana plant will not be operational until 2028, leaving the US vulnerable in the short term. Readers should know that SK hynix went from near bankruptcy in 2001 to a global giant, and its success is intrinsically tied to the AI bubble or revolution. If AI demand slows, SK hynix could face overcapacity similar to what it suffered in 2019, when memory prices fell. For now, the company appears at the peak of an unprecedented upcycle.