SK Hynix’s American depositary receipt (ADR) climbed 27.3% on Tuesday, its third day of trading in the U.S., nearly erasing the 9.3% decline from the previous session that came during a sharp selloff in South Korea’s stock market. Because legal and operational limits restrict how many common shares can be converted into U.S. depositary receipts, the ADR’s premium over the company’s Seoul-listed common stock expanded sharply to 51%.
SK Hynix (000660) also opened 10% higher in South Korea. ABMedia said the move could lift memory-related names in Taiwan, including Nanya Technology (2408), Macronix (2337), Winbond (2344) and Powerchip (6770).
Conversion limits and options trading pushed the premium higher
According to ABMedia, SK Hynix’s depositary receipt issuance in the U.S. reached $26.5 billion, and each ADR represents one-tenth of a common share. Supply in the U.S. market has been tight because converting South Korean common shares into ADRs is subject to legal and quota constraints.
After options trading in the ADR officially opened on a U.S. options exchange, investors in the world’s largest derivatives market were able to access the volatile memory-chip stock more easily. That helped drive the premium between the ADR and the Seoul-listed common shares to 51%, well above the 3% gap seen during the public issuance period.
Rebound came as markets weighed AI valuation and cycle concerns
The report said global financial markets had been dealing with two concerns before the rally: elevated valuations across the AI ecosystem and the possibility that semiconductor capital spending had already reached a cyclical peak.
Against that backdrop, SK Hynix’s ADR fell 9.3% on Monday alongside the drop in the South Korean market, then rebounded 27.3% the next day. ABMedia said the price action showed that, even with caution around the semiconductor cycle, international institutional investors were still willing to maintain sizable allocations to companies with leading high-performance memory technology.
Memory and optical communications shares in the U.S. drew support
As a core supplier of high-bandwidth memory, or HBM, SK Hynix’s rally spilled over into related names, ABMedia said. The stock stood out on the U.S. market and improved sentiment toward memory-chip makers, optical transmission component suppliers and optical communications companies tied closely to AI hardware infrastructure.
The return of capital to those parts of the technology sector suggested that, after a brief pullback, growth in the hardware supply chain was still being supported by structural flows, according to the report.
Taiwan memory names came back into focus
ABMedia said the strong U.S. performance of SK Hynix’s ADR could act as a positive catalyst for Taiwan’s semiconductor supply chain. The report noted that Nanya Technology had posted solid results earlier but failed to break to a new high after being dragged by weakness in South Korea. With SK Hynix stabilizing, memory-related shares such as Macronix, Winbond and Powerchip were seen as potential rebound candidates.