SK Hynix plans U.S. IPO to capitalize on AI memory demand

South Korean memory chipmaker SK Hynix, a rival to Samsung and U.S.-based Micron, announced on Monday that it is planning to sell nearly 17.8 million shares in a U.S. initial public offering. The company will offer American depositary receipts (ADRs)—certificates that allow U.S. investors to buy foreign stock without trading directly on an overseas exchange. Each ADR will represent a tenth of a common share. According to Bloomberg, the company could raise around $28 billion in the IPO, a figure based on SK Hynix’s closing share price last Friday in Seoul. The company is expected to price the securities on Thursday and begin trading on Friday.

The planned listing comes as SK Hynix experiences an AI-fueled boom. Systems that run artificial intelligence are highly memory-intensive. As large-scale cloud computing providers (often called hyperscalers) like Amazon, Microsoft, Google, and Oracle build out AI data centers nationwide, demand has outpaced supply. This has created a shortage of memory chips, including high-bandwidth memory (HBM), DRAM, and NAND—the different types of chips that store and move data inside AI systems.

This supply squeeze, which has been characterized as “RAMageddon,” is already impacting consumer electronics. Apple has raised prices on Mac computers and iPads due to the memory shortage. Meanwhile, SK Hynix’s financial performance has grown: its first-quarter revenues were up nearly 200% over the same quarter last year, and its stock price is up about 260% so far this year.

To address the shortage, South Korean tech companies, led by SK Hynix and its rival memory chipmaker Samsung, have vowed to spend over $550 billion on building out new manufacturing capacity. However, memory needs for AI may change by the time these facilities are built, potentially leaving companies with more supply than the market wants and lowering prices. For now, investors are looking for chipmakers that can match the trajectory of U.S.-based rival Micron. Driven by AI-driven memory demand, Micron has seen its valuation increase by nearly 700% over the past year to a market value of more than $1 trillion.

Why it matters

SK Hynix’s move to tap U.S. capital markets highlights how the AI-driven memory chip shortage is transforming from a supply chain bottleneck into a financial opportunity for chipmakers. It also underscores the race among hardware suppliers to secure the capital needed to fund manufacturing expansions.