SK hynix may ease ‘RAMmageddon’ fears with major US IPO plans

SK hynix, the South Korean memory chip giant already listed on the KOSPI, is preparing for a potential U.S. listing that could raise between $10 billion and $14 billion, according to reports.

The company confirmed this week that it has confidentially filed a Form F-1, targeting a listing in the second half of 2026. While the fundraising figure is significant, the bigger question revolves around whether a U.S. listing could help boost the company's valuation as a key supplier in the rapidly expanding AI semiconductor ecosystem.

Despite its central role in producing high-bandwidth memory (HBM) — a critical component used in AI systems built by companies like Nvidia — SK hynix has historically traded at a valuation discount compared to global peers. The company currently has a market capitalisation of around $440 billion, yet its valuation multiples remain lower than those of semiconductor firms listed in the United States. This has raised questions about whether geographic listing location, rather than operational strength, is influencing its market valuation.

The proposed U.S. listing is widely viewed as an effort to close that valuation gap, particularly when compared with competitors such as Micron.

According to a Seoul-based semiconductor analyst, "SK hynix's U.S. listing could help close a long-standing valuation gap with global peers. Despite having comparable — or in some areas stronger — production capacity than U.S.-based chipmakers, the Korean company has historically traded at a discount, partly due to its primary listing in Korea."

Structural ownership considerations are also shaping the potential deal. SK Square, the company's largest shareholder, held a 20.07% stake as of December 2025 and is required under South Korea's holding company regulations to maintain at least a 20% ownership position.

Based on current share prices, issuing roughly 2% in new shares could enable SK hynix to raise between $10 billion and $14 billion while still allowing SK Square to retain its required ownership threshold. Under Korea's Fair Trade Act, holding companies must maintain minimum stakes — at least 20% in listed subsidiaries — to preserve control.

There is precedent for this strategy. Taiwan Semiconductor Manufacturing Company has at times seen its U.S.-listed shares trade at a premium to its domestic listing, particularly during periods of heightened demand for AI-related chips. This suggests that cross-listing can influence how global investors value the same underlying business.

The potential IPO is already influencing sentiment across South Korea's broader semiconductor industry. Following SK hynix's filing, some investors have begun urging Samsung Electronics to consider a similar U.S. listing. Artisan Partners, a major shareholder, indicated that an American depositary receipt (ADR) could help Samsung improve its valuation and make its shares more accessible to U.S. retail investors.

Beyond valuation, the planned listing is also seen as a move to secure capital for future AI-driven expansion. At the company's annual general meeting on March 25, CEO Noh-Jung Kwak emphasised that financial strength will be essential to sustain growth in the AI era. He noted that SK hynix is targeting approximately $75 billion (over 100 trillion KRW) in net cash to support long-term investments.

The rising cost and limited availability of memory have become a bottleneck for AI development and other sectors, including gaming. This situation, often referred to as "RAMmageddon," is expected to persist until at least 2027 if supply constraints are not addressed.

Some technology companies are exploring alternative solutions. For instance, Google recently introduced a memory compression approach called TurboQuant, designed to improve the efficiency of AI systems' use of memory resources.

Even so, expanding production capacity remains essential. SK hynix is preparing for large-scale capital investments, including a plan to spend approximately $400 billion by 2050 on a semiconductor cluster in Yongin, South Korea. The company is also building new facilities in South Korea and Indiana, with planned investments of about $25 billion and $3.3 billion, respectively.

In addition, the chipmaker recently announced a $7.9 billion agreement to acquire advanced extreme ultraviolet (EUV) lithography equipment from ASML by 2027. This investment is aimed at expanding production of high-bandwidth memory to meet surging AI demand.

All of these efforts could be supported by a major U.S. IPO, which, if successful, may not only strengthen SK hynix's financial position but also encourage other Korean semiconductor companies to follow a similar path.