A company many people might never have heard of a year ago has landed the largest ever US listing by a foreign corporation, granting American investors direct access to one of the hottest trades of the year.

On Friday, semiconductor manufacturing giant SK Hynix begins trading at $149 per share, raising about $26.5 billion. The last foreign company to notch a record US debut was Chinese e-commerce giant Alibaba, which raised $25 billion in its 2014 IPO.

The historic milestone set by a once-obscure name underscores the enthusiasm that has repeatedly driven tech stocks to record highs this year. A massive buildout of data centers to enable artificial intelligence has boosted demand for the memory chips that SK Hynix makes.

The rush to buy shares of SK Hynix and Samsung, the world’s largest memory chipmaker, has turned South Korea’s stock market into the world’s seventh-largest after it overtook Canada’s in May. Both companies, which combined account for about 50% of Seoul’s Kospi index, hit $1 trillion valuations in the past few months.

However, an eagerness to profit from the AI boom, particularly among retail investors, has also exacerbated extreme market swings. Sharp sell-offs in South Korean stocks have triggered temporary trading halts several times this year.

Jung In Yun, chief executive officer at Fibonacci Asset Management Global, said that while foreign investors have been quick to sell in order to lock in gains, the SK Hynix listing indicates there is still plenty of optimism in AI.

“The strong demand for the offering suggests global appetite for AI infrastructure remains intact, despite recent volatility,” he said.

Boom or Bust?

SK Hynix and Samsung have notched record profits this year as AI has gobbled up the world’s supply of memory chips – and demanded more. Projections for a prolonged shortage have spurred the companies to invest heavily in manufacturing capacity, encouraged by their national government.

Earlier this month, South Korea announced plans to spend more than $500 billion on new chipmaking facilities in the country’s southwest. President Lee Jae Myung has called for fast implementation of the plans to secure land, water and power and maintain the nation’s lead in advanced technology.

In a regulatory filing, SK Hynix said the funds it raises in the US market will help the company construct new production facilities in Korea.

“This pivotal $26.5 billion U.S. listing gives them the firepower to out-scale Samsung, close the valuation gap with U.S. rivals such as Micron, and secure the elite talent with attractive compensation and boost corporate morale,” said MS Hwang, research director at Counterpoint Research, who specializes in memory semiconductors.

Still, the rapid expansion from memory chip manufacturers, along with the rise of leveraged bets on those companies, have raised concerns about a looming downturn in the semiconductor market, given its cyclical nature.

Borrowing by retail investors in the Kospi market has risen to record levels this year, according to data from the Korea Financial Investment Association. Some South Korean lawmakers have warned of the financial risks of buying leveraged exchange-traded funds, which track single stocks such as SK Hynix and can compound gains – or losses.

Tech stocks in both South Korea and the US have also been vulnerable to shifts in sentiment over AI, and signs that the technology is not delivering the returns on investment or revolutionary changes promised.

“The danger is that if earnings disappoint expectations, which is what we kind of think is likely, that share prices especially at the tech companies do start to fall towards the backend of 2027 and you see a slowdown in US business investment,” said Gareth Leather, senior Asia economist at Capital Economics, in a briefing this month.

“Then it’s very likely at some point you’re going to see this boom in Asian exports turn into a bust.” (CNN)

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