- SK Hynix is due to list ADRs on Nasdaq on 10 July
- The listing improves access, but does not change the investment case
- The AJ Bell funds already own SK Hynix through emerging market index exposure
- The company is a key supplier of high-bandwidth memory for AI chips
- Strong performance has increased both exposure and concentration risk
- Emerging markets remain a useful route into non-US technology leaders
James Flintoft, head of investment solutions at AJ Bell, comments:
“SK Hynix is scheduled to begin trading on Nasdaq on 10 July, listing American Depositary Receipts (ADRs) under the ticker SKHY. The company plans to raise up to around $29 billion, depending on final pricing. At the top of that range, the deal would exceed the $21.8 billion Alibaba raised in New York in 2014. Proceeds are expected to fund additional capacity, including the first fabrication plant at the Yongin semiconductor cluster, an advanced packaging facility and lithography equipment.
“The company sits at the centre of the AI build-out. It has a dominant position in making the High-Bandwidth Memory (HBM) that feeds data to AI accelerators. Nvidia is one of its key customers. Its market value passed $1 trillion in May, making it one of a small group of Asian companies to reach that level alongside TSMC and Samsung Electronics.
“The raise highlights the benefits of a global investment outlook. It illustrates how a major company providing a crucial component in the infrastructure underpinning the growth in AI could go under the radar for investors without exposure to less high-profile regions, in this case the South Korean Kospi Composite Index of which SK Hynix is a member
“This is not a new name for the AJ Bell funds. The funds have held SK Hynix for years through passive exposure tracking the MSCI Emerging Markets ex China index, where it was the third-largest constituent at the end of June with a weight above 9%, behind TSMC (over 18%) and Samsung (over 10%). It is therefore already one of the largest underlying holdings across the AJ Bell fund range. The share price rose 308%* in the year to late June, and investors participated through index exposure rather than a single-stock call. A market-cap-weighted allocation to emerging markets put the business in the portfolio and allowed its weight to rise as the company delivered.
“What changes on 10 July is access. US investors could already gain exposure to SK Hynix through index funds and ETFs, as we do, but stock-picking the company directly meant buying the Seoul-listed shares and dealing with time zones, currency conversion and local settlement. An ADR removes some of those frictions.
“There is also an index classification wrinkle. MSCI still classifies Korea as an emerging market, so SK Hynix sits outside MSCI World and instead appears in MSCI Emerging Markets and the broader MSCI All Country World Index. FTSE Russell classifies Korea as developed, meaning global or world index funds that track FTSE indices can already include the stock. In effect, the Nasdaq listing gives US investors a simpler single-stock route into a company that many global and emerging market portfolios have already owned at scale. It is also a useful reminder that a meaningful part of the AI supply chain trades in Seoul and Taipei, not just New York.
“The new shares represent around 2.5% of the company, a modest dilution in exchange for funding capacity in a supply-constrained memory market.
“The company hopes a US listing will narrow the valuation gap with global peers such as Micron Technology. It may, but a new line of stock does not change the cyclicality of memory pricing. The shares will still respond to the same demand signals from AI capital spending, regardless of where they trade.
“Our approach is unchanged. The index sets the position size, diversification across regions and asset classes does the risk management, and events like this show why the exposure exists. Companies central to global technology demand do not all list in the US. Owning emerging markets means owning them as part of a diversified allocation, without needing to chase the story after it reaches Nasdaq.”
*Source: Morningstar Direct, in Korean won terms, 01/01/26-30/06/26