UBS urges buying SK Hynix ADRs and shorting Seoul shares

SK Hynix’s Nasdaq American depositary receipt offering drew about $196 billion of demand for a $28 billion sale, highlighting intense investor appetite for the South Korean memory-chip maker as artificial intelligence infrastructure spending drives demand for high-bandwidth memory. The deal involved 17.79 million common shares structured as 177.9 million ADRs at a 10:1 ratio, and Bloomberg previously reported that Baillie Gifford Overseas, Coatue Management and Situational Awareness Partners indicated interest of up to $7 billion combined. UBS Group AG’s recommendation to buy the U.S.-listed receipts and short the company’s Seoul shares remains a key angle, reflecting expectations that the ADRs could trade at a premium. Earlier coverage said the offering was more than seven times oversubscribed, with orders from global long-only funds, sovereign wealth funds and Asia-focused institutional investors, while underwriters including Bank of America, Citigroup, Goldman Sachs and JPMorgan Chase were set to price the deal after the local market close. The proceeds are earmarked for expanding production capacity and buying advanced ASML EUV lithography equipment, underscoring how SK Hynix is using deep U.S. capital markets to fund growth in a segment seen as critical to AI data centers. SK Hynix is one of only three companies able to produce HBM at scale, alongside Samsung and Micron, and its chips are used in Nvidia data-center GPUs. The company’s Seoul-listed shares have climbed roughly 260% year-to-date, adding to investor focus on whether strong AI-driven demand can sustain its lead in the memory market.