The U.S. stock exchange debut of SK Hynix continued its rollercoaster ride with surges on the Nasdaq as the firm's newly listed American Depositary Receipts (ADRs) surged almost 28% to $193.92 on Tuesday.
The jump was reflected in the memory chip giant's home country, with a 13% rise recorded on the Korea Exchange (KRX) as of Wednesday.
Hynix's twists and turns followed its $26.5 billion initial public offering (IPO) last week. Euphoria turned to concern when its U.S.-listed shares dropped almost 8% on Friday, while dropping 15.4% in Seoul – its biggest one-day fall in nearly two decades. The fluctuations were put down to renewed tensions in the Middle East and profit sell-offs following the U.S. IPO.
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Samsung and other semiconductor stocks also dropped in South Korea, causing U.S. memory stocks, including Micron, Sandisk, and Western Digital to subsequently wobble. Fears remain over a memory oversupply cycle, while current constraints continue, as explored in SDxCentral's Memory & Storage Supplement.
Ryu Young-ho, senior analyst at NH Investment & Securities, told Reuters that investors were spooked over a lack of increase in fourth-generation high-bandwidth memory (HBM4) shipments, likely due to Nvidia product scheduling for the upcoming Vera Rubin platform.
SK Hynix is set to stabilize its U.S. footprint with other ventures, including its AI Company (AI Co.) venture, which centers around a $10 billion investment in its U.S.-based Solidigm arm. Another subsidiary, SK Hynix NAND Product Solutions, is expected to expand with a $481 million investment from fellow SK Group firm SK Telecom.
Brendan Burke, research director on semiconductors and supply chain at Futurum Equities, told SDxCentral that Hynix's IPO proceeds will be used for investments in AI data centers and AI startups, adding to the funds already allocated to AI Co.
"With memory becoming a strategic asset to AI innovators, as evidenced by Anthropic's bilateral deal with Micron, direct investment in data center projects and startups can expand SK Hynix's market position and build demand for next-gen products like custom HBM (high bandwidth memory) and high-bandwidth flash," Burke said.
The analyst added that SK Hynix Ventures portfolio companies, such as D-Matrix, were experiencing high demand for in-memory computing to make better use of scarce memory resources, encouraging fundraising to further support their growth.
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