Wall Street can’t get enough AI as SK Hynix rallies massively in Nasdaq debut

SK Hynix landed on the Nasdaq with a 13% first-day gain, ending Friday at $168.01 after starting at $170. U.S. buyers got a direct route into South Korea’s second-biggest listed company. The shares used the temporary code SKHYV for the opening session and will change to SKHY on Tuesday.

The chipmaker sold its U.S. depositary shares for $149 each and collected $26.5 billion. A filing had placed the target near $29 billion, set aside for plants, tools, and production spending.

The listing followed a rise of more than seven times in the company’s home-market shares over the past year, pushing its value close to $1 trillion.

SK Hynix expands output as AI customers keep asking for more chips

At home, only Samsung Electronics (KRX: 005930) is worth more. SK Hynix sits beside Samsung and Micron Technology (NASDAQ: MU) as one of the three main suppliers of memory used in phones and computers. Its parts already sit inside products sold by Apple (NASDAQ: AAPL) and Dell Technologies (NYSE: DELL), so Americans have used its hardware without knowing the name.

Memory was one of the least interesting categories in semiconductors before AI. However, demand for chips from data centers has strained supplies and driven prices to unprecedented heights, thereby giving memory an important commercial role.

SK Hynix leads in high-bandwidth memory, or HBM, used with AI processors from Nvidia (NASDAQ: NVDA). Basic RAM holds working data for computers. HBM piles several memory layers together so large amounts of data can reach processors faster. SK Hynix built this type of stacked memory before its rivals, and analysts expect it to take more than half of worldwide HBM sales this year.

Chairman Chey Tae-won called the U.S. listing a personal milestone. “It’s a kind of dream, and now it’s a dream come true,” he told CNBC’s Kristina Partsinevelos on Friday.

Chey said buyers are not satisfied with the company’s growth plan. SK Hynix has promised to double capacity within five years, yet customers still want a larger increase. “All my customers said that, ‘Well, that’s not enough, man, and, well, we need more,’” he said Friday night.

SK Hynix builds its first U.S. plant and taps federal chip funding

Part of the new spending will go to West Lafayette, Indiana, where the company is putting up its first production site. The project will cost $4 billion and is due to finish in 2028.

This will be achieved through the advanced packaging process that takes place in the Indiana site. This involves connecting the different chips and stacking them into larger components required in HBM and AI devices. This is an important link in the manufacture of memory components and assembling them in computers.

Nvidia is the world’s largest HBM customer. Its chief executive, Jensen Huang, visited SK Hynix during a Seoul trip in June. The companies used the visit to announce a partnership that will run for several years.

U.S. public money is tied to the project. SK Hynix may get as much as $458 million from the CHIPS and Science Act, the 2022 law created to increase chip production inside the country. The U.S. Commerce Department could provide loans worth up to $570 million.

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