US-listed shares of SK Hynix jumped 13% after the South Korean chipmaker raised $26.5 billion through a share sale, fresh evidence that investor appetite for AI-linked semiconductor stocks remains strong despite a recent pullback in the sector.

Korea’s second most valuable company is the latest beneficiary of an AI-driven investment wave that has fueled massive interest among chipmakers expected to benefit from a boom in artificial intelligence, triggering hundreds of billions of dollars in capital spending.

SK Hynix’s American Depository Receipts (ADRs), with 10 ADRs representing one common share, opened at $170 each. The offering priced shares at $149, a 2.7% premium to the average share price over the previous three trading sessions in Seoul.

Also read | Near-Rich-Rich: The Story of Chip Giant SK Hynix

The listing marks the second largest US share sale since SpaceX’s record IPO last month and is expected to fund new factory construction while giving SK Hynix direct access to the world’s largest investor base. The offer was subscribed more than seven times, a source told Reuters on Thursday.

Recent declines in chip stocks

However, chip stocks have lost some momentum in recent weeks following an extraordinary rally, as investors remain cautious about the pace of future AI spending. SK Hynix’s Seoul-listed shares have fallen nearly 25% from a record high two weeks ago. Still, the stock is up roughly 630% from a year ago.

Rising demand, meager supply

High-bandwidth memory (HBM) chips have become increasingly rare due to heavy spending by major technology companies on advanced AI processors, driving up prices and making the manufacturers some of Wall Street’s favorite AI bets. Investors increasingly see the sector as supplying the “picks and shovels” needed to power the AI ​​boom.

SK Hynix’s US-based rival Micron has also seen its shares rise 711% over the past 12 months. Analysts say a US listing could help narrow the valuation gap between the two companies by broadening SK Hynix’s investor base and improving access for global investors.

Despite its lead in HBM chips, SK Hynix trades at about 5.8 times forward earnings, compared with about 7 times for Micron, Reuters reported.

Also read | SK Hynix makes its US debut today. Will investors sell Micron to buy AI memory leader?

As technology companies race to build faster and more capable AI models, they continue to invest hundreds of billions of dollars in the infrastructure needed to support the technology, raising capital through equity offerings and debt markets to finance expansion.

SK Hynix’s listing comes nearly a month after Elon Musk’s SpaceX went public in the largest initial public offering on record. SK Hynix’s valuation has risen more than sevenfold in the past year as demand for AI infrastructure has led to shortages in computer memory and skyrocketed prices.

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