SK hynix is pushing to list on the Nasdaq in the United States on the 10th of next month through the issuance of American Depositary Receipts (ADR). The depository receipts to be issued are expected to total up to 45 trillion won. As access for foreign investors improves, expectations for a re-rating of its valuation are likely to grow.

On the 24th, SK hynix announced that, for the Nasdaq Stock Market listing of its ADRs, it plans to issue new shares worth up to 45.45 trillion won. This equals 2.5% of the total shares. The exact amount will be determined according to the total amount to be raised for the ADRs, which will be finalized after demand forecasting. SK hynix said, “The funds raised will be used as construction and capital expenditure for the first-phase fab of the Yongin semiconductor cluster, the Cheongju P&T7 advanced packaging fab, and EUV (extreme ultraviolet) lithography equipment.”

An ADR is a system that allows a company from a country other than the United States to raise capital without listing directly on a U.S. stock market. A Korean company deposits its shares with a global bank (depositary), and when that bank issues ADRs, those ADRs are traded on Nasdaq like shares. Companies such as TSMC of Taiwan, ASML of the Netherlands, ARM and AstraZeneca of the United Kingdom, Novo Nordisk of Denmark, and Toyota of Japan trade on U.S. markets using this method.

SK hynix is proceeding with the process with the goal of listing on Nasdaq on the 10th of next month. It plans to submit a securities registration statement to the Korea Exchange and a registration statement to the U.S. Securities and Exchange Commission (SEC). It will then begin demand forecasting among institutional investors. After that, it will set the offer price, sign an underwriting agreement, and begin trading on the Nasdaq market on the 10th local time in the United States. The detailed timetable may change depending on regulatory approval and market conditions.

The lead managers are four global investment banks, including Bank of America (BofA). Reuters said, “SK hynix has emerged as one of the biggest beneficiaries of the global AI boom,” and added, “(This ADR ) could be larger than the $21.8 billion raised by Alibaba, the Chinese e-commerce company, in the past.”

The Nasdaq listing is also expected to bring a re-rating of SK hynix shares. Listing on Nasdaq can improve access for foreign investors and increase liquidity. It could also open the way for inclusion in the Philadelphia Semiconductor Index or related semiconductor ETFs. TSMC, which listed earlier, is trading at a premium of more than 10% compared with its Taiwan common shares.

Although the issuance of new shares dilutes the value held by existing shareholders, some analysts say it can be a positive factor in the long term if subsequent capital expenditure improves memory supply capacity and profitability. SK hynix plans to continue efforts to announce specific shareholder-return measures within the year.