SK Hynix is set to debut on Wall Street, and this move could have a big impact on Micron. The South Korean memory chip maker said on Wednesday that its American depositary receipts will start trading on the Nasdaq Global Select Exchange on July 10. The company aims to raise about $29 billion, which is much higher than the $10 billion previously reported by South Korean media. Micron shares rose 3.8% in premarket trading on Wednesday, just before its fiscal third-quarter earnings were released. Here’s why SK Hynix’s listing could create two main challenges for Micron.
The first issue is supply. SK Hynix plans to use all the money it raises to build new factories and buy equipment. This big increase in manufacturing could boost the global supply of memory chips, which would likely push prices down. With more chips available, all three major memory makers could lose some of their pricing power.
The second issue is how investors might spread their money. With SK Hynix’s ADR listing, U.S. investors can now buy shares in the company directly for the first time. This gives them another option to invest in the memory chip market. Some may choose to divide their investments between Micron and SK Hynix, or even move all their money from Micron to SK Hynix, now that it’s available on U.S. exchanges.
Micron’s stock is up 269% this year, even after dropping 13% on Tuesday due to worries about how long big tech companies will keep up their heavy AI spending. South Korean memory stocks might be hinting at what’s next for Micron. SK Hynix rose 1% in Asian trading on Wednesday, and Samsung jumped 9.8% after the Chosun Daily said Samsung plans a 90 trillion won share buyback over the next three years. Samsung did not respond right away to a request for comment.
