SK Hynix US Listing Demand Soars

**SPEAKER_1** (0:02)
Bloomberg Audio Studios, podcasts, radio, news. Bloomberg Tech is live from the heart of Silicon Valley with Ed Ludlow in San Francisco.

**Ed Ludlow** (0:22)
This is Bloomberg Tech. Coming up, SK Hynix's US listing is way oversubscribed, priming the Korean memory maker for the biggest ever foreign first-time share sale in America. Plus Micron boosts its spending on new American plants to $250 billion to meet surging memory demand. And Meta unveils its latest AI model, pricing it aggressively and talking up its agentic capabilities versus Google's Gemini. Mark Zuckerberg tells Bloomberg why semiconductors and memory chips continue to dominate the new cycle and the market action. NASDAQ 100, Philadelphia Semiconductor Index. Bloomberg reports that Korean memory maker, SK Hynix, is telling investors it plans to price its US listing at $149 per American depository receipt. That would make it the largest ever first time US share sale by a foreign company with demand for memory chips absolutely ripping. Then at the same time, SK's great American rival, Micron, wants in on the act. The company from Boise, Idaho, is boosting its plan spending in the US to $250 billion. Rapid AI infrastructure expansion is eating up memory chips and Micron's spending more to meet that on the equity capital market story. Bloomberg's Bailey Lipschel is in New York leading Bloomberg's coverage of semiconductors in King and San Francisco. Bailey, I'm going to start with you. This is an issue of math, right? Explain the ADR process, where we think they're indicating right now they will price and why this would be the biggest first time US share sale by a foreign entity.

**Bailey Lipschel** (1:58)
Yeah, so at $149 per ADS, that equates to, call it a 3% premium from where shares closed at in South Korea on Thursday night for them. The math works out because every ADR equates to one-tenth of one share. So there's your math problem there for you, Ed. One thing to keep in mind, we did report and break that this was a deal that was over seven times oversubscribed. Small number at the headline, but when you look under the surface, nominally, that's north of $160 billion in demand, similar to what we saw for Sarabras, again, would be a record setting and will be a record setting listing for a foreign issuer here in the US, so outpacing Alibaba, but falling short of Saudi Aramco's domestic listing. The big question going forward now is, do they stick to that price and how does the stock trade relative to those South Korean shares? As you know, they normally will trade in terms of ADRs at a premium, so pricing it at 3 percent, do we see that get closer to double digits? Certainly something top of mind.

**Ed Ludlow** (2:54)
SK is going to raise between $26 and $28 billion for a reason, Bloomberg's Ian King. They need to boost capacity. But the history here is really important. SK Group bought Hynix in 2012, and at the time, in the memory landscape, maybe they weren't taken seriously. Bring us forward to present day and explain where SK sits relative to Micron and of course its domestic rival Samsung.

**Ian King** (3:16)
Yeah, I mean, this is really a rags to riches story. This is a company that was in trouble and was quite likely to, came very close to being bought by its competitive Micron, and Samsung refused to buy it as well. I mean, it's come in an incredible long way, and if you look at it from the investor perspective, we've got more revenue tripling to more than $200 billion this year at an 80% gross margin, so it's come so far and done so well.

**Ed Ludlow** (3:47)
Ian, every memory chip also starts with a silicon wafer and like big news story this morning Micron boosting its US investment to $250 billion from $200 billion, so it's $50 billion more. But it's a bigger story about re-onsuring capacity.
Explain that to us.

**Ian King** (4:05)
Yeah, I mean, the big story really, and this is what ties SK to Samsung to Micron is, how much capacity is going to get put in place, but more importantly, how quickly. There's no doubt that demand is very, very strong right now. Nobody is saying that over the next two years or so that we're going to be in anything like balance or oversupply, but this is an industry that's never got it right over the long term. They've never had a market like AI before, but they've never been able to balance those things. So really what everybody is focusing on is how much gets spent when, and if we see a massive flood of that $250 billion getting deployed in the US very quickly, then that is something that investors will pay close attention to.