NEW YORK, July 10 (Xinhua) -- South Korean semiconductor maker SK Hynix made its highly anticipated trading debut on the Nasdaq stock exchange on Friday, following a blockbuster 26.5-billion-U.S.-dollar American Depositary Receipt (ADR) offering.
The listing stands as the largest U.S. share sale by a foreign corporation. Globally, the transaction trails only SpaceX's massive capital raise earlier this year.
Market sources noted that the book-building process concluded enthusiastically, finishing more than seven times oversubscribed.
"Global semiconductors is the most crowded trade in the world right now," said Thomas Hayes, chairman at Great Hill Capital in New York. "The bankers and the issuer, in this case SK Hynix, are meeting demand where it is. They're seeing excessive valuations, and they want to take advantage of it."
Although SK Hynix's primary shares in Seoul closed 0.27 percent lower at 2.18 million won on Friday and have retreated 25 percent from their recent record highs, the company's stock value remains more than 600 percent higher than a year ago.
Based in Icheon, South Korea, SK Hynix vertically stacked memory components are vital for the intense data processing required by graphics processing units manufactured by market leaders Nvidia and AMD. According to regulatory filings, the company intends to deploy the total capital proceeds to aggressively expand its production capacity.
According to SK Hynix's earnings for the first quarter, the spread of memory efficiency technologies was forecast to enhance the economic viability of AI services, leading to an expansion of the overall service scale and further driving memory demand.
Equity strategists of Saxo Bank noted that the heavily oversubscribed order book serves as concrete proof that institutional capital is shifting away from theoretical AI software toward "the hidden, physical machinery behind the theme."
Still, chip stock with rich valuation could face deep corrections and dampen business investment if investors feel disappointed to their operating results, according to economists.
