SK Hynix's $26.5B U.S. IPO ranks second-largest in U.S. history

Harsh Chauhan, The Motley Fool Fri, July 17, 2026 at 11:18 AM PDT | 4 min read

• SPCX: -5.43%
• NVDA: -2.21%
• SKHY: +1.13%
• 2222.SR: +0.15%

Space Exploration Technologies, popularly known as SpaceX, created history last month when it went public by raising $75 billion, making it the largest initial public offering (IPO) ever.

SpaceX overtook energy and chemicals giant Saudi Aramco, which raised $25.6 billion during its IPO in 2019. However, it didn't take long for Aramco to slip by one spot with the U.S. listing of South Korean semiconductor giant SK Hynix (NASDAQ: SKHY) this month.

SK Hynix raised $26.5 billion, and its shares jumped 13% during the company's Nasdaq debut on July 10. Let's examine what the company plans to do with the proceeds from its share sale and whether investors should buy this semiconductor stock by reviewing its prospects and valuation.

SK Hynix Needs Money to Build New Fabrication Facilities

SK Hynix is the second-largest memory manufacturer in the world after Samsung. Its market share of dynamic random-access memory (DRAM) was 29% in Q1. SK Hynix also controlled 18% of the global NAND flash market in the first quarter, according to Counterpoint Research. What's more, it is the largest player in the high-bandwidth memory (HBM) market with a 58% share.

These market share numbers explain why SK Hynix needs to aggressively expand its fabrication capacity to fill the memory supply gap. The company predicts that the overwhelming demand for memory chips won't stop anytime soon. SK Hynix CEO Kwak Noh-Jung recently told Reuters that the supply crunch will worsen in 2027. He also added that memory demand will continue to exceed SK Hynix's production capacity into the next decade.

Not surprisingly, SK Hynix is going all out to build additional capacity to meet end-market demand. The company aims to double its wafer production capacity over the next five years. As a result, it intends to invest more than $700 billion over the long run to boost its manufacturing capabilities in South Korea. The proceeds from its U.S. listing will be used to support its expansion plans.

Specifically, SK Hynix intends to use the $26.5 billion raised from its U.S. IPO to:

• Construct a new fab in South Korea
• Build a new packaging facility in South Korea
• Purchase advanced extreme ultraviolet (EUV) lithography machines to manufacture cutting-edge chips

These investments are necessary considering that the global memory market's revenue is projected to increase from $225 billion in 2025 to $1.28 trillion in 2027, according to market research firm TrendForce.

SK Hynix is in a strong position to capitalize on this opportunity due to its market share and ambitious expansion plan to address the severe memory shortage. All this makes this semiconductor stock a compelling buy right now, given its attractive valuation.

The Valuation Makes This Chip Giant a Must-Buy

SK Hynix's stock has been volatile in its short life as a U.S.-listed company. However, investors would do well to consider the bigger picture. It trades at just 25.7 times trailing earnings, and the forward earnings multiple is even more attractive.