San Francisco Frontiers - SK hynix surges on first day of trading on Wall Street

The Asian semiconductor giant's American depositary shares (ADSs) ended its first session at $168 after being priced at $149, with the listing on the tech-heavy Nasdaq index raising $26.5 billion.

SK hynix, a major supplier of advanced memory chips to industry behemoth Nvidia, has seen profits skyrocket thanks to the global race to build artificial intelligence data centers.

Tech stocks have tumbled in recent weeks on fears of overheated valuations -- although SK hynix has soared more than 220 percent this year in Seoul -- and questions about when enormous global AI spending will reap returns.

But the Nasdaq listing enjoyed considerable interest, and was more than seven times oversubscribed, according to US media.

The amount raised did not come close to the record $75 billion raised in SpaceX's IPO last month, which made founder Elon Musk the world's first trillionaire.

But it beat out Saudi Aramco's 2019 $25.6 billion debut in the Gulf, and the $21.8 billion raised by Chinese tech firm Alibaba in its New York initial public offering.

SK hynix listed through ADSs, which allow slices of foreign companies to be traded on US public markets.

- High bandwidth -

Dilin Wu, research strategist at Pepperstone, told AFP that the pricing says clearly that "the AI memory cycle is real, the earnings are real".

Wu earlier called the listing "a huge development that should broaden the capital base for the memory sector".

The offering was led by BofA Securities, Citigroup Global Markets, Goldman Sachs (Asia) and J.P. Morgan Securities, SK hynix said.

SK hynix shares jumped 2.7 percent on Seoul's Kospi index following the announcement.

The company's market capitalization on the Kospi soared past $1 trillion in May.

That milestone was also recently hit by domestic rival Samsung Electronics and US chipmaker Micron -- with AI thrusting the three firms into a previously exclusive club of around a dozen companies, nearly all American.

An image of an SK hynix jacket went viral in South Korea this year as a symbol of wealth and success, with parody posts depicting it as a "golden ticket" to luxury boutiques or better dating prospects.

Samsung, SK hynix and Micron dominate the global market for the advanced components known as high-bandwidth memory (HBM), used in AI servers alongside other data-crunching semiconductors.

As chipmakers plough resources into lucrative HBM, shortages of the less flashy memory chips in consumer electronics are pushing up prices, with Apple hiking the cost of its MacBooks and iPads.

- New chip hub -

Counterpoint Research analyst MS Hwang said SK hynix wants to triumph over Samsung in the red-hot memory chip market.

"Along with the HBM leadership it has demonstrated until recently, the company is now planning to take the lead in terms of volume as well," Hwang told AFP.

"Funds from its US listing can support such a goal."

SK hynix said Friday it plans to use the proceeds from the offering to fund construction of the first fab at a new semiconductor cluster in Yongin near Seoul, and to build an advanced packaging facility in the central city of Cheongju, among other projects.

The company, along with Samsung, is also involved in a massive public-private investment of 800 trillion won to build a new chip hub in southwest South Korea.

The AI chip boom has fuelled debate over what South Korea should do with the tax windfall, as well as workers' demands over pay packages -- with Samsung averting a strike by agreeing a deal on bonuses.

H.Reyes--SFF