SK Hynix debuts on Nasdaq. Will that narrow its ‘Korea discount’?
POLAND – 2025/09/05: In this photo illustration, an SK hynix logo is seen displayed on a smartphone with the American flag in the background. (Photo Illustration by Omar Marques/SOPA Images/LightRocket via Getty Images)
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As global chip giant SK Hynix makes its Nasdaq debut Friday, the listing will test whether the stock will be able shed its long-standing “Korea discount.”
“Korea discount” refers to the tendency of South Korean companies to trade at lower valuations compared to global peers due to concerns over corporate governance and opaque conglomerate structures.
The listing on the Nasdaq via American depositary receipts, or ADRs, is set to grant SK Hynix direct access to the world’s deepest pool of capital, a move that experts debate could narrow this discount.
LSEG data showed SK Hynix trades at just 4.8 times 12-month forward earnings, compared with the industry median of 29.84 times and U.S. rival Micron Technology‘s 6.6 times, despite its leadership in the fast-growing high-bandwidth memory, or HBM, market.
“We see room for that gap to narrow with the ADR listing, though we do not expect the Korea discount to close entirely,” Rolf Bulk, head of semiconductors and infrastructure at Futurum Group told CNBC.
The divergence in price-to-earnings ratios between Micron and SK Hynix is mainly due to “access” and “familiarity,” as SK Hynix’s limited accessibility for U.S. funds has kept its valuation lower for years despite its stronger position in AI memory, said Zavier Wong, market analyst at multi-asset trading platform eToro.
“Hynix’s stock going up isn’t the same as the discount shrinking, so while its price moved up, the gap against Micron didn’t budge,” Wong said.
Shares of Micron have surged nearly 250% this year, while SK Hynix has soared 240%, LSEG showed.
Peter Kim, global investment strategist at KB Financial Group, echoed that the listing should also improve access for overseas investors who have historically faced hurdles in buying Korean equities.
“Additional access could help global investors trade the Hynix stock, which still trades at a discount to the KOSPI, Micron, and Samsung,” he said. “A Nasdaq listing would be a major factor in narrowing that discount, as the listing requirements needed to list there would ease some concerns among U.S. investors.”
Nasdaq listing rules require companies to meet financial and liquidity thresholds, including minimum market value, public float, shareholder count and share-price requirements. Listed companies are also subject to corporate governance standards covering areas such as audit committees, director independence and shareholder voting rights.
Investor access
With ADRs priced at $149 apiece and the IPO oversubscribed, the company will raise about $26.5 billion, but analysts said access to U.S. investors could ultimately prove more valuable than the capital itself.
Ji Cheong, associate director at S&P Global Ratings, said that while SK Hynix’s IPO will partially support its growing capex, which is forecast at 50 trillion won to 70 trillion won annually over the next two years, the vast majority will be funded through internal cash flow.
“The company is expected to generate over 200 trillion won in annual operating cash flow across the next two years,” Cheong added.
Still, Wong expects the listing will help in strengthening SK Hynix’s ability to fund expansion and could pave the way for further U.S. initiatives, including buybacks, greater investor engagement and broader expansion into the American market.
Can SK Hynix stay ahead?
The listing also comes as investors assess whether SK Hynix can maintain its lead in the fast-growing HBM market that underpins AI accelerators.
Rayliant lead portfolio manager Philip Wool said SK Hynix has become “something of a victim of its own success,” as explosive demand for HBM has far outstripped its ability to supply the market.
That created an opening for Samsung Electronics and Micron to accelerate investment in competing products while securing their own supply agreements with hyperscalers seeking to diversify AI chip supply chains.
Futurum Group’s Bulk expects SK Hynix to remain the top HBM supplier, although its market share is likely to decline from roughly 57% last year to around 50% this year before falling into the low-40% range over time as Samsung gains ground and Micron cements itself as the third major player.
The bigger challenge is not market share but capacity. “The real debate is less about share and more about who can bring online the capacity to meet it,” Bulk said, adding that even announced fab expansions remain insufficient to meet expected demand through the end of the decade.
