SK Hynix eyes to narrow 'Korea discount' with Nasdaq debut

SK Hynix debuted on the Nasdaq on Friday as the South Korean memory chipmaker seeks to narrow its long-standing "Korea discount" and attract more US investors. Analysts say the Wall Street listing could improve the company's valuation by giving it greater access to global capital, although they do not expect the discount to disappear entirely.

Nasdaq listing could boost valuation

SK Hynix began trading on the Nasdaq through American depositary receipts (ADRs), marking a major milestone for the AI memory leader as it expands its presence among international investors.

The listing comes as the company continues to trade at a significant discount to many global semiconductor peers despite leading the fast-growing high-bandwidth memory (HBM) market, which powers artificial intelligence accelerators.

According to LSEG data cited by CNBC, SK Hynix trades at 4.8 times its projected 12-month earnings, compared with an industry median of 29.84 and US rival Micron Technology's 6.6.

Analysts attribute much of the valuation gap to the so-called "Korea discount" — the tendency for South Korean companies to receive lower market valuations because of concerns surrounding corporate governance, conglomerate ownership structures and limited accessibility for overseas investors.

Analysts expect greater access to US investors

Experts believe the Nasdaq listing could make SK Hynix more accessible to US institutional investors, potentially improving market liquidity and investor confidence.

Rolf Bulk, head of semiconductors and infrastructure at Futurum Group, said there is room for the valuation gap to narrow following the ADR listing, although he does not expect it to close completely.

eToro market analyst Zavier Wong said SK Hynix's lower valuation has largely reflected limited access and familiarity among US investors rather than weaker business performance.

Peter Kim, global investment strategist at KB Financial Group, also said the listing should make it easier for international investors to trade SK Hynix shares while reassuring them through Nasdaq's stricter financial reporting and corporate governance requirements.

IPO raises billions as expansion continues

The ADRs were priced at $149 each, with the offering reportedly oversubscribed. The listing is expected to raise around $26.5 billion.

However, analysts say the greater benefit may come from improved access to the world's largest capital market rather than the funds themselves.

S&P Global Ratings estimates SK Hynix will spend between 50 trillion and 70 trillion won annually on capital expenditure over the next two years, but expects the company to finance most of that spending through its own operating cash flow, which is forecast to exceed 200 trillion won annually during the period.

Analysts also believe the Nasdaq listing could support future share buybacks, stronger investor engagement and additional expansion in the US market.

AI memory dominance faces growing competition

The listing comes as investors closely watch whether SK Hynix can maintain its leadership in the HBM market amid intensifying competition.

While the company remains the world's largest supplier of HBM chips, rivals Samsung Electronics and Micron Technology are investing heavily to expand production and secure contracts with major AI customers.

Futurum Group expects SK Hynix to remain the leading HBM supplier but forecasts its market share could decline from about 57% last year to roughly 50% this year before gradually falling into the low-40% range as competitors gain ground.

Despite the increasing rivalry, analysts say the industry's biggest challenge remains manufacturing capacity rather than market share, with demand for AI memory expected to continue outpacing supply for several more years.