The Morning Download: SK Hynix Listing Signals Unabated Demand for AI

Good morning. The U.S. listing of South Korean memory chip maker SK Hynix is seven-times oversubscribed, a clear signal of unabated global enterprise demand for AI.

The company raised $26.51 billion via American depositary receipts in the largest share sale by a non-U.S. company, according to the Wall Street Journal.

“The offering was seven times oversubscribed, with more than 500 investment firms vying for shares, according to two people familiar with the matter,” the Financial Times reports.

The listing will raise capital for SK Hynix’s expansion of production capacity, which is strained by demand for memory chips that is pushing up costs for goods throughout the supply chain, including consumer devices.

“The company is building new chip fabrication plants in Korea and purchasing extreme-ultraviolet lithography scanners from the Netherlands’ ASML,” the FT says.

Demand for SK Hynix also reflects its close connection to AI chip leader Nvidia. “Although Nvidia relies on all three major memory-chip companies, SK Hynix is its biggest supplier. The companies recently strengthened ties through a multiyear agreement in which the Korean company will provide components for Nvidia’s supercomputer and robotics technology,” Barron’s says.

Tech leader takeaway. The SK Hynix U.S. listing is a clear signal that long-term structural demand for AI remains is still growing, all of the understandable anxiety over mounting capital costs notwithstanding. Don’t just stare at where the fútbol is bouncing, look at where its vector is pointing, and that is straight into the data center.

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• The European Commission on Friday issued preliminary findings that Meta Platforms's addictive designs of Instagram and Facebook breached the bloc’s Digital Services Act. If the findings are confirmed, Meta could face a fine of up to 6% of its global revenue for its platforms, WSJ reports.

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Follow Isabelle Bousquette on LinkedIn, Instagram, X, and TikTok for more behind the scenes on her tech and AI coverage, and lately, her contributions to the WSJ Leadership Institute's new Executive Resilience series, where she's profiling America's top execs about their fitness and wellness habits.

Follow Belle Lin on LinkedIn and X for her latest reporting on enterprise technology and AI.

Steven Rosenbush is chief of the enterprise technology bureau at the WSJ Leadership Institute. He also has a column. You can follow him on LinkedIn.

Tom Loftus is the editor of The Morning Download. He suggests following Isabelle, Belle and Steve on their various social channels. But if you insist, here's his LinkedIn.