Meet SK Hynix, the trillion-dollar chipmaker debuting on U.S. markets

U.S. investors are getting a new way to buy into the memory boom.

SK Hynix, the second most valuable company in South Korea, behind only Samsung, is slated to begin trading on the Nasdaq on Friday. The market debut, coinciding with the company’s hefty expansion plans for the U.S., comes after a more than sevenfold increase in its stock price over the past year, a rally that’s lifted SK Hynix’s market cap to about $1 trillion.

Many Americans don’t know the name SK Hynix, but they’ve likely had plenty of exposure to the company’s products. Along with Micron and Samsung, SK Hynix is one of three primary makers of computer memory used in laptops and phones sold by companies such as Apple and Dell.

Memory has long occupied a sleepy corner of the semiconductor market. That’s changed dramatically over the last couple years as surging demand for artificial intelligence has upended the industry, creating severe shortages for the chips and sending prices to all-time highs.

SK Hynix is the leader in the high-performance memory that’s used in AI chips from Nvidia, the world’s most valuable company. While memory components are typically relatively simple chips, often called RAM, that every computer needs to store data, high-bandwidth memory (HBM) is more complicated, as it stacks many layers of traditional memory together. SK Hynix was the first to do it, and analysts project the company will capture more than half the market this year.

In June, Nvidia CEO Jensen Huang visited SK Hynix on a trip to Seoul, as the two companies announced a multiyear partnership. Nvidia is the biggest HBM buyer.

“That advantage has positioned SK Hynix as one of the biggest beneficiaries of the rapid growth in AI infra,” said TrendForce analyst Ellie Wang.

SK Hynix will trade on the Nasdaq under ticker symbol SKHY (initially SKHYV.) The company plans to raise around $29 billion by issuing American depositary receipts (ADRs) in order to fund new factories and equipment, according to a regulatory filing.

Some of that buildout is taking place in the U.S. SK Hynix is constructing its first production facility in the country, scheduled for completion in 2028. The $4 billion plant in West Lafayette, Indiana, will be used for what’s known as advanced packaging, an essential part of the process for producing HBM that involves connecting and stacking individual chips into larger systems that can be used in a computer.

SK Hynix expects to receive up to $458 million in funding from the U.S. CHIPS and Science Act, passed in 2022 as the centerpiece of a plan to build up the domestic chip industry. The company could also receive up to $570 million of loans from the U.S. Commerce Department.

It’s not just HBM that’s boosting SK Hynix. The whole memory industry is experiencing soaring prices due to the AI crunch, which means…