SK hynix will issue American Depositary Receipts (ADRs) worth more than KRW 45 trillion and list them on the Nasdaq in the United States on July 10. With the large-scale capital raise, access by overseas investors to SK hynix shares is expected to increase.

SK hynix announced in a regulatory filing on the 24th that its board of directors had resolved that day to issue ADRs worth KRW 45,453.45 billion. The planned listing date is July 10. The total ADR value is calculated based on the maximum issuance limit of 17.79 million shares multiplied by the closing price on the 23rd (KRW 2,555,000). SK hynix explained that the final total amount will be determined after a book-building process targeting overseas institutional investors.

A depositary receipt (DR) is a substitute security that allows shares issued in a company’s home market to be traded on overseas stock exchanges by depositing the underlying shares with a foreign bank as collateral. DRs traded in the United States are called ADRs. The move will enable foreign investors to trade SK hynix shares more easily via the Nasdaq.

SK hynix stated that it decided to issue ADRs to secure large-scale investment funds amid rising demand for artificial intelligence (AI) semiconductors and intensifying competition. The company explained that the funds raised will be used for capital expenditures, including the first-phase fab of the Yongin Semiconductor Cluster (investment of KRW 31 trillion) and the Cheongju P&T7 advanced packaging fab (KRW 19 trillion).

Expectations are also emerging that the ADR listing could support the share price. With improved access for overseas investors, some observers say the company may be able to narrow the valuation gap with U.S.-listed peers, where it has been relatively undervalued. Taiwan’s TSMC, the world’s largest foundry (contract semiconductor manufacturing) company, also issues ADRs that trade on U.S. stock markets.

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