SK Hynix Nasdaq debut surges on AI demand, but 35% premium warns of overvaluation

SK Hynix, one of the world's largest memory chip makers, began trading American depositary receipts (ADRs) on the Nasdaq this month following a secondary listing. ADRs are certificates representing the underlying foreign stock, designed to make it easier for U.S. investors to buy and sell shares on American exchanges. The stock experienced an initial boom followed by volatility.

The company's excitement among investors stems from its central role in the AI infrastructure buildout. SK Hynix manufactures NAND flash and DRAM memory used in everything from Apple iPhones to AI data center servers. In the first quarter, the company's sales surged 198% year over year to $35.5 billion（約5.7兆円）, while earnings nearly quadrupled to almost $27 billion（約4.3兆円）. Operating margin reached a record 72%, up from 42% in the prior year quarter. These gains reflect both a spike in demand for memory driven by AI infrastructure spending and a supply shortage that allows memory makers to command premium prices. SK Hynix holds an estimated 58% of the high-bandwidth memory (HBM) market—a critical component for AI systems—compared to competitor Micron Technology's 21% share. The company is one of the leading memory providers for Nvidia, the dominant AI chip maker.

Demand shows no sign of abating. The top four hyperscalers—Meta, Alphabet, Microsoft, and Amazon—have announced plans to spend a combined $750 billion（約120兆円） on AI infrastructure this year alone. Alphabet has already committed to spending more in the coming year than it spent this year, and other companies like SpaceX are also ramping up AI capital expenditure. The memory supply shortage appears likely to persist as long as this spending continues.

However, the article raises a significant valuation concern. SK Hynix's ADR shares currently trade at a 35% premium compared to its common shares listed in South Korea, with the premium having reached as high as 51%. A 2025 MCSI study found that from 2020 to 2025, the average divergence between ADRs and their locally listed common stocks was in the range of 2% to 4%. As a Financial Times article quoted in the piece notes: "Most ADRs trade with a small (less than 5 per cent) premium above the foreign-listed equity due to some mixture of convenience and fees. A 51 per cent premium is huge, and speaks to the enormous US flows into memory at this exceptional moment." Taiwan Semiconductor, another prominent AI stock, maintains a 15% ADR premium due to heavy U.S. demand, but SK Hynix's gap is substantially wider. The article suggests that history indicates this premium is unlikely to persist and will eventually narrow, putting downward pressure on the ADR price. Accordingly, the author recommends that investors hold off on buying the stock until the premium cools off significantly.

SK Hynix's Nasdaq debut capitalizes on a historic moment for memory chip makers: global tech giants are pouring capital into AI infrastructure at unprecedented scale. The top four hyperscalers—Meta, Alphabet, Microsoft, and Amazon—plan to spend a combined $750 billion（約120兆円） on AI infrastructure this year alone, and Alphabet has already signaled it will spend even more next year. This sustained demand, combined with tight supply, has pushed SK Hynix's financial performance into rarefied territory—a 72% operating margin in the first quarter, up from 42% a year earlier, and earnings growth of nearly 400%. The company's commanding 58% share of the high-bandwidth memory market positions it as a critical beneficiary of this shift.

However, the ADR listing has created a significant pricing anomaly. The 35% premium U.S. investors are paying—which has reached as high as 51%—sits far outside the normal 2% to 4% range that historically separates ADRs from their home-market counterparts. While Taiwan Semiconductor demonstrates that some premium pricing can persist (it trades at a sustainable 15% premium due to U.S. demand), SK Hynix's gap is presented as unsustainable. The article frames this as a caution rather than a fundamental issue with the company's business: the memory demand that drove SK Hynix's explosive growth appears real and likely to endure. The risk is not to the company's earnings trajectory, but to the price U.S. investors pay relative to South Korean shareholders—a gap that history suggests will eventually compress.

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