SK hynix ponders U.S. stock market listing through ADR as AI chip demand soars

SK hynix said Wednesday that it is considering a U.S. stock-market listing through an American depositary receipt (ADR) program, but stressed it had not made a decision.

The SK hynix headquarters in Icheon, Gyeonggi, on July 24. [YONHAP]

SK hynix said Wednesday that it is considering a U.S. stock market listing through an American depositary receipt (ADR) program, but stressed it had not made a decision.

The company issued the statement after the Korea Exchange asked it to clarify media reports.

An ADR allows foreign companies to list shares on U.S. exchanges by issuing certificates backed by shares held by a U.S. depositary bank. Korean companies such as Posco, Shinhan Financial Group, SK Telecom and KT have previously launched ADRs in the United States.

With global demand for AI memory chips soaring, speculation has grown in recent months that SK hynix could pursue a U.S. listing to close its valuation gap with U.S. peers. While the company’s stock has risen 243 percent this year, it still trails Micron, the No. 3 global memory chipmaker listed on Nasdaq, in terms of price-to-book ratio. Analysts say an ADR could help unlock some of that value.

The amount of treasury shares SK hynix could potentially use for an ADR listing is about 2.4 percent, estimated at around 9 trillion won ($6.12 billion).

Taiwan's TSMC is a well-known example of a semiconductor firm that launched an ADR listing. After debuting on the Taiwan Stock Exchange in 1993, TSMC went public in New York in 1997. Within three years, its market capitalization grew by 150 percent.

A TSMC logo is displayed on a wall in Hsinchu, Taiwan, on April 15. [REUTERS/YONHAP]

However, ADR listings can create tension between shareholder returns and employee compensation. TSMC once had an employee stock bonus system that awarded shares at par value, offering effectively tax-free stock options. This system was abolished after its U.S. listing to align with global accounting standards. TSMC later adopted restricted stock awards instead.

In September, SK hynix reached a labor-management agreement allocating 10 percent of annual operating profit to employee bonuses, with payouts reportedly exceeding 100 million won per employee. Meanwhile, shareholder pressure has increased, and recent amendments to Korea’s Commercial Act now require companies to cancel some of their treasury shares.

SK hynix is also at the center of major national policy discussions, including the proposed "National Growth Fund" (translated) and potential regulatory easing of Korea’s separation between industrial and financial capital for high-tech manufacturing.

The National Growth Fund aims to invest more than 150 trillion won over the next five years in strategic industries such as AI, semiconductors and biotechnology. In October, SK hynix and Samsung Electronics signed a supply agreement with OpenAI’s Stargate project to provide high bandwidth memory chips — a deal expected to require massive investment in chipmaking facilities.

SK Group Chairman Chey Tae-won recently announced that investment in the company's Yongin cluster would increase from 120 trillion won to 600 trillion won. On the day Samsung and SK signed a letter of intent with OpenAI for the Stargate project, President Lee Jae Myung instructed his office to review ways to ease regulations that restrict financial companies' investment in industrial businesses.

SK hynix closed at 587,000 won on Wednesday, up 3.71 percent, on the Kospi.

The Deepseek logo is seen in this illustration taken Jan. 27. [REUTERS/YONHAP]

Globally, the semiconductor sector is engaged in an unprecedented spending race. In the past three months alone, Nvidia has announced $18 billion in investments: $5 billion in Intel, $1 billion in Nokia, $10 billion in Anthropic, and $2 billion in Synopsys. A separate $100 billion deal under negotiation with OpenAI would further raise the stakes.

In China, hedge funds are also seeing major returns by combining AI and semiconductors. One standout is DeepSeek, an AI model developer that emerged in 2024 as a formidable challenger to OpenAI and Google. DeepSeek originated from High-Flyer, one of China’s leading quantitative hedge funds.

Quantitative investing involves the use of data analysis, mathematics and AI models to guide investment decisions. In 2023, High-Flyer's internal AI research unit spun off to form DeepSeek, entering the AI space with strong technical capabilities and a stockpile of over 10,000 Nvidia graphic processing units (GPUs) — giving it a significant head start.

High-Flyer has also reportedly earned major returns from its investment in Moore Threads, a Chinese GPU maker. According to Chinese media, Moore Threads went public on the Shanghai Stock Exchange on Dec. 5, and within five days, its share price surged to 6.5 times the initial offering price.

This represents a new investment model in China, where financial capital not only leverages AI to generate profits but also develops AI software and uses that expertise to guide profitable hardware investments.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom. BY SHIM SEO-HYUN [shin.minhee@joongang.co.kr]