Should U.S. Investors Buy Into a Wall Street Listing for SK Hynix?

Tuesday’s hard reset on memory-chip makers produced plenty of handwringing. Is the rally in memory stocks over?

Today’s answer is a loud shout “No!”

Strong earnings from Micron Technology (MU) saw the stock up 17.8% in after-hours trade. That has fed into a strong showing in Asia on Thursday. Micron has settled back slightly in early trade but is still up 12.4% in early going.

Memory Moves Together

Memory stocks are trading in tandem at the moment. So we see the East Asian markets rise on Micron momentum, powering the chipmakers listed in South Korea and Japan.

SK Hynix (HXSCL) (KR:000660), fresh from plunging 14.2% peak to trough on Tuesday, is up 13.1% by Thursday’s close. As you were! That leaves it 5.1% higher than the end of last week, at yet another record closing high.

Samsung Electronics (KR:005930), the other heavyweight on the Korean exchange, has been slightly more measured, ending Thursday up 5.3%. But it set a new high-water closing mark last Thursday.

The benchmark Kospi matched Samsung’s move with a 5.4% lift, briefly rising above the 9,000 mark before settling to end at 8,930. It set a closing high of 9,306 last Friday, and is up a world-leading 111.9% as of Thursday’s close.

Hynix Preps for U.S. Listing

Hynix filed on Wednesday for a listing on Nasdaq. Hynix shares, if all goes as planned, will start trading next month under the ticker SKHY.

The company is the main supplier of HBM chips to Nvidia (NVDA). Microsoft (MSFT) also recently selected Hynix to make HBM chips for its Artificial Intelligence accelerator, Maia 200.

The aim is to diversify the chipmaker’s investor base and fund an expansion in production. Hynix is looking to sell 17.9 million newly issued American Depository Shares, with a first day’s trade on July 10. That would represent 2.5% of Hynix total outstanding stock.

The offering should raise 45.5 trillion won ($29.5 billion). That would surpass the $24 billion raised by Alibaba Group Holdings (BABA) (HK:9988) when it listed in September 2014, the largest initial public offering in the world at that time, and still the largest U.S. listing by an Asia-based company.

A Positive for Hynix

It will be a positive to see Hynix shares trading on Nasdaq. The Korean market is hard for international investors to access, and few Korean stocks have U.S. listings. While there are currently unsponsored shares trading over the counter under the ticker HXSCL, they have very low trading volume and are illiquid.

Having a U.S. investor base should help Hynix shares to trade with greater stability. The Korean market has become incredibly volatile thanks to the leveraged exchange-traded funds (ETFs) introduced to invest into Hynix and Samsung. On May 27, 16 such ETFs started offering 2x leverage plays on Hynix and Samsung, which have proved very popular locally.

It has not been unusual to see daily moves of 5% or more in either direction for Hynix and Samsung, with circuit breakers already kicking in four times this year in Seoul. The market pauses if there are selloffs of 8% or more, with a second trading halt if there’s a 15% decline, and trading halted if the market falls 20%.

Should U.S. Investors Buy Hynix Over DRAM?

U.S. investors are already able to gain exposure through the Roundhill Memory ETF (DRAM). Samsung, Hynix and Micron make up 73.0% of the exposure. Individual investors would likely be better off holding that ETF rather than direct Hynix shares.

The ETF offers a slim amount of diversification, although it is still a highly concentrated portfolio. The exposure rounded out with stakes in Kioxia Holdings (KXIAY) (T:285A), Sandisk (SNDK), Western Digital (WDC), Seagate Technology Holdings (STX), Nanya Technology (NNYAF) (TW:2408) and Winbond Electronics (WBEKY) (TW:2344), those nine names making up 98.0% of the 18-stock portfolio. For U.S. investors, that adds Tokyo-listed Kioxia and the two names in Taiwan, Nanya and Winbond. Again, extra diversification.

DRAM has been one of the most successful ETF launches of all time, quickly amassing $25.6 billion in assets. It started trading in April at $26.14 and has shot as high as $81.60 on Monday. It may soon test those highs again. It neared $80 with a 14.0% gain in after-hours trade, giving back some of that after the opening bell to show an 8.5% early gain at $75.85.

Trading In and Out of DRAM

I’ve suggested trading in and out of DRAM due to the volatility in Korea, which is magnified by the popularity of single-stock exchange-traded funds focused on Samsung and Hynix. The Hynix listing and Micron’s strong numbers, though, suggest the ETF can also form a long-term holding.

For individual investors, I would prefer DRAM over SKHY to mitigate some of the single-stock risk. Samsung Electronics doesn’t have U.S.-listed depository shares, although it trades in London. So DRAM also offers the advantage of easy Samsung exposure.

Hynix fed into Tuesday’s selloff following a report that it intends to emphasize commodity DRAM chips and adjust the pace of expansion for the production of its top-flight, sixth-gen High Bandwidth Memory (HBM) chips.

The main driver of Hynix ascent has been its rapid move into the HBM market. Samsung was punished over the course of 2024 and the first half of 2025 for its emphasis on DRAM, and has only seen its shares play catchup now that it is successfully securing HBM orders.

Lost in Translation?

So it doesn’t make a lot of sense that Hynix would shift its focus from next-gen chips to commodity DRAM. Still, operating margins are increasing for DRAM chips and have actually eclipsed the margins on HBM, according to the Chosun Ilbo newspaper. The report says Hynix believes it can maintain HBM market share in the 50% to 60% range – it’s currently commanding 57% of that market slice – even if it delays the transition of some product lines to cutting-edge HBM4E production.

There may be something lost in translation there – I don’t believe Hynix is ditching HBM for DRAM, even if it may look to capture a greater DRAM market share. Samsung is the market-share leader in DRAM chips, with a 38% market share as of Q1, according to Counterpoint Research. That compares with 29% market share for Hynix and 22% for Micron.   

In any case, the subtleties of Hynix production emphasis are forgotten today, thanks both to Micron’s stellar earnings and the Hynix decision to list on Wall Street. The U.S. share issuance will fund new production facilities for the Korean company.

Micron and Hynix are now similar in size in terms of market capitalization, at $1.3 trillion. Samsung is narrowly ahead thanks to its preferred shares, with a total market cap of $1.5 trillion.

The situation might have been very different. Micron almost bought Hynix back in 2002, with the Korean chipmaker hobbled by the high levels of debt accumulated to fund its expansion. But the deal fell through, leaving Hynix trading as a penny stock that was forced into a 1:21 reverse stock split in April 2003. At the time, Hynix shares traded as low as 2,630 won following the reverse split. Hynix shares closed Thursday at 2,917,000.

Hynix intends to deploy 45.5 trillion won ($29.6 billion), matching the listing proceeds, to build a new chip-fabrication plant and advanced-packaging operation in South Korea. Those are scheduled to open in 2030.

That should help Hynix to bolster its position. It is the HBM market-share leader, the Counterpoint Research figures for Q1 show, with 58% of that market, compared with 21% each for Samsung and Micron. But Hynix has seen its share shrink from 69% in Q1 2025.

Meantime, earnings for all three companies are growing at an exceptional clip. The last quarter was a five-fold increase for Hynix, an eight-fold increase for Samsung, and an almost 15-fold increase for Micron.

An earnings disappointment for Nvidia, Hynix, Samsung or Micron would shake the sector. But we didn’t get a Micron meltdown after its impressive numbers Wednesday. If anything, the “meltup” continues.

At the time of publication, McMillan was long positions in DRAM, NVDA and MSFT.