SK Hynix listed on Nasdaq with a financing scale of $26.5 billion, breaking Alibaba's record for overseas IPO financing in the U.S. that had been held for over a decade. On the first day, it surged by double digits, confirming investors' sustained enthusiasm for the AI memory theme.

On its first day of listing, SK Hynix's stock surged by double-digit figures. The opening price was $170, directly 14% higher than the issue price. The intraday highest gain once approached 19%, but it closed up nearly 13%.

It's so popular because subscriptions are so popular, with oversubscription multiples exceeding 7 times. Top global investment institutions like Baillie Gifford and Coatue Management are rushing to spend, with just three cornerstone investors taking up about $5 billion in shares.

Wall Street always has the sharpest sense. Seeing SK Hynix's popularity, the Nasdaq president said this will attract more overseas companies to list in the U.S. At the same time, major fund companies are also preparing to ride the wave of popularity, launching leveraged ETFs specifically targeting SK Hynix next week (such as doubling long or contrarian short products), giving investors more ways to play.

| Raking in $26.5 billion, breaking Alibaba's record

South Korean memory chip giant SK Hynix has officially listed on the US NASDAQ, marking a historic listing. This issuance raised about $26.5 billion in total, breaking Alibaba's record set in 2014 to become the largest IPO by a non-U.S. company in the U.S., and the second largest IPO in the U.S. this year (just behind SpaceX).

Why can it sell for more on the US stock market?

SK Hynix's US stock offering price this time was set at $149, about 2.7% higher than its domestic share price in Korea. Moreover, after the market opened, US stock prices were about 17% higher than Korean stocks. Why are American investors willing to offer higher prices? There are mainly two reasons:

Rarity makes things valuable: This time, very few stocks were released in the US market, accounting for less than 3% of the company's total market value, making it difficult to buy in the short term.

More convenient investment: U.S. investors prefer trading in US dollars, and the abundance of derivatives like ETFs and options in the U.S. stock market attracts a large influx of new capital.

Is there still room for growth in the future?

Analysts believe that as long as the AI storage market remains hot and SK Hynix may be included in various U.S. indices or ETFs in the future, this premium phenomenon of "US stocks being more expensive than Korean stocks" may continue to widen.

At the bell-ringing ceremony, SK Hynix CEO Kwak Noh-Jung excitedly stated that this is truly a historic day for the company, as high-bandwidth memory (HBM) stands at the very heart of the AI revolution.

The underwriting team for this IPO is extremely impressive, led by four major investment banks: Bank of America, Citigroup, Goldman Sachs, and JPMorgan Chase. Currently, this stock is trading on Nasdaq under the temporary ticker "SKHYV," and starting July 13, it will officially switch to the regular ticker "SKHY."

| Wall Street is frantically buying SK Hynix

The fundamental reason SK Hynix has become so popular is that it has stepped on the biggest wave of the AI era. As the world's largest manufacturer of HBM (High Bandwidth Memory) chips, its products are the "golden partners" of AI chips from companies like Nvidia and AMD. With the rapid advancement of global AI infrastructure construction, HBM chips are in short supply, prices are soaring, and SK hynix has naturally become the most sought-after commodity on Wall Street.

Fund manager: Good days will last at least two or three years

Investment institutions are very optimistic about this rally. Di Zhou, fund manager at Thornburg Investment Management, bluntly stated that we are currently in a strong "memory supercycle," and SK Hynix is the highest-quality pure memory chip stock on the market.

She explained why this wave of dividends lasted so long: because building a new chip factory would take at least three years, and the supply side was stuck. As long as AI demand does not decrease, this "memory shortage" will last at least another two to three years.

Valuation advantage means great future potential

Although SK Hynix's stock price has surged more than sevenfold over the past year, its forward P/E ratio is about 5.8 times, still cheaper than its old US rival Micron Technology (about 7 times). Analysts believe that this US listing can help narrow the valuation gap with Micron. Bloomberg analysts also pointed out that SK Hynix has long secured its position as Nvidia's "number one supplier," and with a larger market share, its scale advantage is very obvious.

Supporting all of this is the global tech giants' frenzied spending. By 2027, global investment in cloud computing and AI infrastructure is expected to approach $1.5 trillion, a sharp increase of 40% to 50% compared to now. Faced with such an unfathomable demand pool, SK Hynix's supercycle is just beginning.

| U.S. stocks are on a frenzy, but Korean stocks are experiencing a "roller coaster"? What is the market afraid of?

Although SK Hynix is thriving in the U.S. market, its homeland of South Korea is somewhat like a "fire and ice" world.

While US stocks surged, SK Hynix's share price in South Korea fell slightly, with the entire Korean stock market (KOSPI index) plunging 7.6% that week. Although SK Hynix has surged 235% overall this year, recent sharp volatility has left investors uneasy. This year, it has already experienced over 50 days of daily fluctuations exceeding 5%, a "roller coaster" thrill greater than the combined impact of the past three years.

Why is that? Because the semiconductor industry has long faced the hidden risk of "excessive price increases leading to overcapacity." Some analysts bluntly stated that Global Semiconductor is currently the "most crowded transaction," rushing to go public and raise funds while valuations are high. This serves as a warning to companies hoping to follow the trend and go public: market standards are becoming increasingly discerning.

With massive investments, SK Hynix is set to accomplish two major things

Since it has raised so much money, how does SK Hynix plan to spend it? The prospectus gives a clear answer: buy equipment, build factories! Aggressive Expansion: The company not only plans to invest $4 billion in an advanced packaging plant in Indiana, USA, but also to build a super wafer cluster in South Korea with a cost of $390 billion.

In addition, SK Group Chairman Chey Tae-won revealed that SK Group Chairman Chey Tae-won may continue to expand investment in the U.S. and plans to develop hyperscale AI data centers outside of Korea.

Simply put, in the future, customers may no longer need to pay directly for chips, but will, like recharging as a video website membership, "rent" storage resources monthly or annually. This model requires robust software support and is mainly designed to address memory bottlenecks in AI computing deployment.

Kingtech Perspective | The storage supercycle enters its "second half," seeking a certainty premium

AI computing power bottleneck shifts, HBM ushers in a "structural bull run"

SK Hynix's record-breaking IPO and oversubscription in the U.S. mark Wall Street's re-evaluation of the AI storage sector. Currently, the core bottleneck of AI computing power has shifted from the GPU itself to HBM (High Bandwidth Memory). As the parameter scale of large models climbs, memory capacity and bandwidth have become key constraints on system performance.

Building new wafer fabs will take at least three years, which means that before 2027, the "structural shortage" of HBM will be difficult to alleviate, and the industry is shifting from the traditional "strong cycle" to a "growth + cycle."

Pay attention to the liquidity dividends brought by the "US stock premium" and "index inclusion."

SK Hynix's US stock market has about a 17% premium over Korean stocks, mainly due to US market liquidity, derivative instruments, and passive capital pools. With regular trading starting July 13, if ADRs are included in the Nasdaq 100 or Philadelphia Semiconductor Index in the future, it will trigger massive passive capital systematic buying.

For A-share investors, close attention should be paid to the progress of domestic substitution in the domestic storage industry chain (especially HBM industry chain, advanced packaging, and core materials). The valuation reshaping of overseas leaders will directly push up the valuation ceiling of related domestic stocks.

Be wary of "crowded trading" and potential cyclical backlash

Despite strong fundamentals, global semiconductors have become the "most crowded trade." SK Hynix's Korean stock market has risen over 235% this year, with recent volatility significantly increasing. Investment banks and issuers are taking advantage of the high valuation window to "ride the trend" and raise funds.

Investors need to be wary of the risk of "oversupply" that could be triggered by the concentrated release of new capacity over the next three years. In terms of investment strategy, it is recommended to allocate core assets on pullbacks, avoid blindly chasing highs during emotional peaks, and closely monitor whether the capital expenditure (Capex) growth rate of global cloud providers is slowing marginally.