American chip and memory manufacturers like Micron Technology Inc. and SanDisk Corp. opened in the red on Friday and may be looking at sharp corrections on the Wall Street as their South korean rival SK Hynix makes its debut.
SanDisk plunged nearly 5% to $1,773.51, Micron traded 2.3% lower at $967.76, Western Digital Corp. slid 1.9% to $564.98, Qualcomm Inc. and Broadcom Inc. were down over 1% to $187.95 and $387.93, respectively. Intel Corp. slumped 4% to a low of $108.17 and Microchip Technology Inc. fell nearly 2% to $87.01
The listing paves another way for US investors to buy into the AI and memory boom through South Korea's second most valuable company after Samsung. SK Hynix raised a record $26.5 billion through share sales, making it the largest ADR (American Depositary Receipts) listing ever.
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The company specialises in manufacturing high bandwidth memory, used to power AI data center servers, Large Language Models (LLMs), and high-end GPUs. Occupying nearly 60% of the global market share, Hynix is a supplier to the some of the biggest semiconductor companies including Nvidia.
However, its shares seem to be struggling slightly on the KOSPI index as they have fallen over 10% in the last five days. SK Hynix's stock closed 0.27% lower at 21,80,000 South Korean won (roughly $1,449.17).
Inspite of its HBM dominance, SK Hynix trades at around 5.8 times forward earnings versus Micron at around 7 times, as per LSEG ​data. By way of this listing, the company will not only enter world's largest financial arena, but might also initiate a correction for Micron's stock price.
"The ADR gives global institutional capital direct access to that leadership without the Korean-market infrastructure friction that historically kept SK Hynix trading at a discount to Micron, and that structural discount should compress over the coming weeks as float builds and coverage catches up," said Harshal Dasani, Business Head at INVAsset PMS.
Micron has zoomed 678.88% in the last year, 239.84% year-to-date, and 130.61% in the last three months alone.
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