ADR plan aims to attract US investors, narrow valuation gap with global peers
SK hynix, the world’s second-largest memory chip maker, is stepping up plans to list on the US market via American Depositary Receipts or ADRs, as it looks to close a persistent valuation gap with global semiconductor peers despite strong AI-driven earnings.
SK Group Chairman Chey Tae-won confirmed Monday that the company is actively reviewing an ADR issuance, signaling a more concrete move beyond earlier disclosures. In a regulatory filing in December, SK hynix said it was considering various shareholder value enhancement measures, including a potential US listing using treasury shares, but noted that no decision had been finalized.
“We are reviewing for listing,” Chey told reporters at Nvidia’s GPU Technology Conference (GTC) 2026 in the United States. “We will become more global, with exposure not only to Korean investors but also to American and global investors.”
Shares of SK hynix rose 3.7 percent to 1.01 million won ($678) in early Tuesday trading on the Kospi, reflecting growing investor attention to the potential listing.
What is ADR — and why it matters
An ADR is a financial instrument that allows foreign companies to trade on US exchanges such as the New York Stock Exchange or Nasdaq without undergoing a full dual-listing process.
Under the structure, a US depository bank holds the underlying shares in custody and issues dollar-denominated receipts, which can be traded like regular US-listed stocks. This significantly lowers barriers for global institutional investors, who can gain exposure without dealing with foreign market frictions such as currency conversion, settlement systems or regulatory complexity.
SK hynix is expected to use part of its treasury stock — about 2.4 percent, or roughly 17.4 million shares — to back the ADR issuance.
The approach mirrors strategies adopted by leading semiconductor firms such as Taiwan Semiconductor Manufacturing Company and ASML. Both have successfully tapped US capital markets through ADRs and secured strong positions in global investor portfolios.
Closing valuation gap
The strategic rationale is clear: SK hynix’s market valuation continues to lag behind global peers, even as its earnings are increasingly driven by the AI boom.
As of late 2025, SK hynix traded at roughly 11 times earnings, compared with around 29 times for US-based Micron Technology. The discount persists despite SK hynix reporting operating profit of 11.38 trillion won in the third quarter alone — roughly double Micron’s over the same period.
Analysts say a US listing could help the company capture the “growth premium” typically assigned by American investors to AI infrastructure firms, particularly those positioned at the center of the data center and high-performance computing ecosystem.
“If shareholder return measures, including ADR issuance, materialize, the company’s valuation could quickly exceed that of Micron,” said Kim Sun-woo, an analyst at Meritz Securities.
Beyond valuation multiples, an ADR listing would also open the door to inclusion in major US semiconductor benchmarks such as the Philadelphia Semiconductor Index. Entry into such indices can trigger automatic inflows from global exchange-traded funds tracking the sector, including those managed by BlackRock and VanEck.
Riding AI supercycle
The timing of the review reflects growing confidence in a prolonged AI-driven upcycle in the semiconductor industry.
Speaking at GTC, Chey said supply constraints could persist through 2030, citing limited wafer capacity and the long lead times required to expand production. “Securing additional wafers takes at least four to five years,” he said, adding that the industry could face supply shortages exceeding 20 percent over the period.
The comments reinforce expectations that demand for high-bandwidth memory — a critical component for AI accelerators — will remain structurally strong.
Analysts say SK hynix’s earnings visibility has improved significantly as memory demand shifts from cyclical to structural, anchored by AI workloads.
“SK hynix’s US listing via ADRs could help resolve concerns over its undervaluation,” said Han Dong-hee, an analyst at SK Securities, adding that global investor access will be key to rerating the stock.
By Jo He-rim (herim@heraldcorp.com)
