The product raised US$26.5 billion, much of which will go toward expanding chip manufacturing.
issued Sunday, July 12, 2026 · 10:18 p.m.
South Korean memory chip maker SK Hynix has just completed the largest initial public offering by a foreign company in the history of the US market. Shares soared 13% on the first day of trading.
There’s a simple bet behind this historic debut. That’s because the artificial intelligence boom has fundamentally changed the decades-long boom-and-bust cycle that has forever defined the memory chip business. SK Hynix will raise $26.5 billion in an American depositary receipt offering, much of which will go toward expanding chip manufacturing, a move the entire industry has long resisted due to past oversupply.
SK Hynix CEO Kwak No-jung told Bloomberg: “Our company has always been in a cyclical industry, so we’ve had ups and downs.” But, he added, “the situation has clearly changed.” The ChatGPT era has created a persistent memory shortage that ripples throughout the supply chain and drives up prices for everything from iPads to Xbox consoles.
Currently, customers are coming to SK Hynix for long-term supply contracts, Kwak said. “They believe the shortage situation will last much longer,” he said, predicting that the shortage could then extend beyond 2030.
Multi-trillion dollar data center investment plans, funded from seemingly every corner of the financial market, from private credit to corporate bonds, depend on this outlook. Alphabet, Amazon.com, Meta Platforms, Microsoft, and Oracle alone have collectively added about $350 billion in debt over the past five years to accumulate hardware to power their AI ambitions.
Many people are betting on all the hype. Wall Street luminaries such as Michael Burry of “The Big Short” fame and Bridgewater Associates founder Ray Dalio are warning of an AI bubble that is about to burst. Even the largest and most successful AI developers have yet to prove that their models and tools can generate profits.
So far, SK Hynix and its memory chip peers Samsung Electronics and Micron Technology have emerged as major beneficiaries of the overspending on AI. There is a growing demand for both traditional memory and a new breed called high-bandwidth memory (HBM) that works with AI systems. SK Group Chairman Choi Tae-won said in an interview with Bloomberg TV, “Demand will continue to grow, but we are confident that supply capacity will never catch up.”
Choi, whose conglomerate controls SK Hynix, said supply and demand for memory chips may not normalize until the world achieves artificial general intelligence, a term loosely defined as the point at which AI systems generally become smarter than humans. “Until then, we need a lot of memory,” he said.
According to Kwak, if the development of AI is anything like the expansion of the Internet, it will last for decades. “It took nearly 30 years to complete the internet infrastructure,” Kwak said. “When it comes to AI, I believe the scale of the AI industry is much larger than the internet.”
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The issuance of U.S. shares caps a remarkable comeback for SK Hynix, which was born out of South Korea’s creditor-led bailout of its two ancestors, LG Semiconductor and Hyundai Electronics, and has suffered through painful boom-and-bust cycles for years.
Choi said SK Hynix currently has multi-year contracts with customers, helping to ensure more stable demand. “This is no longer a cyclical business,” Chey said. “That really gives us another opportunity,” he said, because even in a recession, long-term contracts allow us to maintain production volumes and memory prices.
Chey said the company is also exploring new ways to sell access to its technology, including a concept called “memory-as-a-service.” Without going into details of the plan, he suggested that customers would be able to rent their usage rather than buying the actual semiconductors.
Kwak said part of the rationale for the U.S. product offering was indeed to work more closely with AI customers seeking different types of products and designs, further increasing demand for the company’s chips.
Asked if SK Hynix would consider bringing memory manufacturing to the United States, he said he would not rule out the idea. However, the site must meet the company’s standards for electricity, water and personnel.
Mr Chey said on Friday that the broader SK Group had already invested more than US$35 billion in the US. “My plan is a much bigger number, much, much bigger than $35 billion,” he said.
He is also open to issuing more SK Hynix shares in the US. But first, Chey said, the company needs to offer strong returns to its newly established investors.
“If the revenue increases, the demand will increase even more,” he said. “I think the first thing we have to do is keep the stock stable and then hopefully have upside potential over the long term.”Bloomberg
