SK Hynix Seeks $29B With US Listing to Fund AI Boom

Summary

SK Hynix plans to raise $29.4 billion in a landmark US listing to fund AI memory chip demand. Bloomberg Intelligence's Jake Silverman discusses how the listing could narrow the valuation discount to US peer Micron and provide capital for capacity expansion. He also weighs the debate on appropriate multiples for memory stocks given the cyclical upswing.

• SK Hynix seeks up to $29.4 billion in a US listing that could rank among the top five largest share sales ever.
• Jake Silverman says the listing aims to narrow the historical valuation discount to Micron.
• SK Hynix is not struggling for cash but the capital would protect against cash burn in future down cycles.
• Memory chip forward multiples are around 10x, historically contracting to low-mid single digits at cycle peaks.
• Memory cycle duration depends heavily on AI capital expenditure and capacity expansion from players.
• Micron earnings are expected to show big numbers later that day.