SEOUL, December 10 (AJP) - South Korea's memory giant SK hynix is deliberating to list its treasury shares on a U.S. stock market in the form of American Depositary Receipts (ADRs) to further bolster its corporate value.
In a disclosure responding to the Korea Exchange's request on ADR rumors, the company said Wednesday it would report further details within a month. Shares in Seoul opened 4 percent higher at 588,500 won ($400) upon the release before the market opening.
According to a report by Korea Economic Daily, SK hynix has received multiple proposals from global investment banks to convert some of its treasury shares — roughly 2.4 percent of total outstanding, or 17.4 million shares — into ADRs for trading in the United States.
An investment-banking official familiar with discussions said the initiative is being “pursued with sincerity at the group level as part of a broader push to enhance corporate value,” adding that the company is expected to begin selecting underwriters soon.
Depositary receipts are alternative securities issued to facilitate overseas trading when the underlying shares remain held by a custodian in the home market. When issued in the United States, they are known as ADRs.
For SK hynix, the potential listing represents a bid to break free from what has become a chronic valuation discount.
Shares of the company trade only in Korea, limiting exposure to U.S. passive investors and long-only funds restricted to U.S. markets.
If ADRs are listed in New York, analysts say, SK Hynix could tap a far deeper investor pool and be assessed against global peers on equal footing — particularly Micron Technology, whose business structure, earnings cycle, and product mix closely mirror those of SK hynix.
Yet their valuations diverge sharply: SK Hynix trades at 11.4 times expected 2024 earnings, compared with Micron’s 28.7 times.
Despite SK hynix’s central role in the artificial-intelligence semiconductor “alliance” anchored by Nvidia — supplying high-end HBM chips that have become the industry’s hottest commodity — it remains absent from major U.S. semiconductor ETFs.
In VanEck’s SMH, TSMC’s ADRs account for 9.1 percent; in SOXX, they represent 3.77 percent. SK hynix holds a 0 percent weight in both.
Taiwan Semiconductor Manufacturing Company offers perhaps the clearest precedent. When TSMC listed its ADRs on the New York Stock Exchange in 1997, the move helped global investors apply a higher valuation multiple based on U.S. semiconductor comps.
Over time, TSMC expanded its ADR issuance from 2–3 percent of outstanding shares to nearly 20 percent. A persistent premium of ADR prices over the Taiwan-listed shares ultimately propelled a broader revaluation of the company in its home market — an outcome SK Hynix aims to replicate.
The timing also aligns with Korea’s “value-up” initiative and with ongoing debates over mandatory treasury-share cancellation. Because ADR issuance uses existing treasury shares rather than destroying them, the policy goals remain intact while allowing a company to unlock greater value.
The proposal could also reshape traditional shareholder-return practices in Korea, which have centered almost exclusively on dividends and share buybacks. SK hynix, which shifted into a net-cash position in the third quarter, has faced mounting pressure to boost shareholder payouts.
An ADR listing offers a “third path,” potentially raising its market value without resorting to new borrowing or issuing fresh equity.
A U.S. listing would require compliance with America’s stringent disclosure and accounting standards, improving transparency and governance while broadening access to capital. Shareholders would benefit from any rerating of the stock, while the company could gain the option to raise significant funds at a later stage.
Questions remain over supply. Aside from portions of treasury shares already tied to a 2023 exchangeable bond, SK hynix holds roughly 2.4 percent of its outstanding shares that are usable for ADR issuance — equivalent to about 10 trillion won.
An industry official cautioned that such a float would still rank only as a mid-cap in the U.S. market, suggesting the company may need to repurchase additional shares if it aims to secure material valuation impact.
Its local rival Samsung Electronics trades ADRs over the counter, without listing them directly on the New York Stock Exchange or Nasdaq.
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