On the 10th (local time), the initial public offering (IPO) price of SK hynix’s American Depositary Receipts (ADRs), ahead of a planned listing on the Nasdaq in the United States, was showing strong demand. On the 7th (local time), Bloomberg reported, citing sources, that SK hynix’s ADR IPO had been oversubscribed by “multiple times.”

According to Bloomberg, demand from large, stable, long-term institutional investors and technology-focused investors has been strong from the outset, and about 1,000 institutional investors participated in the investor presentation held on the 6th. Bloomberg added that three major investment firms—Situational Awareness Partners, Baillie Gifford, and Coatue Management—have indicated their intention to purchase up to USD 7 billion in this offering. The offering price will be determined in the afternoon of the 9th, New York time.

However, the transaction is taking place amid what is seen as one of the most intense periods of global semiconductor stock volatility in recent years, which is regarded as a key variable. SK hynix’s share price has declined 17% so far this month and is also down about 9% compared with the ADR reference price (KRW 242,500) specified as the base price in filings with the U.S. Securities and Exchange Commission (SEC). As a result, the size of the offering, which was expected to be USD 29 billion at the end of last month, could decrease to around USD 28 billion.

On the 7th (local time), global investment bank (IB) UBS proposed a strategy of “buy ADRs, sell Korean shares” ahead of the listing of SK hynix’s ADRs on the U.S. stock market. UBS Group’s sales and trading desk stated that investors should buy the American Depositary Receipts (ADRs) that SK hynix plans to issue and sell the underlying shares listed on the Korean stock market. The firm cited the high likelihood that the new receipts will trade at a premium.

UBS also noted that holding costs for ADRs are lower than for the Korean underlying shares. Citing the example of Taiwanese semiconductor company TSMC, whose ADRs are still trading at about a 16% premium to its Taiwan-listed shares, UBS analyzed that SK hynix ADRs could see a similar premium form.

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