Plans for how SK hynix will use the $26.5 billion (about 40 trillion won) it raised through a U.S. Nasdaq listing are emerging as a variable for the foreign exchange market. As the company invests in domestic production facilities such as the Yongin semiconductor cluster, some of the funds raised could be converted into won, which could serve as a supply factor in the foreign exchange market, where dollar funding pressure has persisted recently.
According to the financial investment industry on the 13th, SK hynix raised about $26.5 billion through a U.S. depository receipts (ADR) offering on the 10th local time. The offering proceeds are scheduled to be paid in on the 14th.
SK hynix plans to use the funds to build a fab at the Yongin semiconductor cluster, establish the Cheongju P&T7 advanced packaging plant, and introduce advanced production equipment such as extreme ultraviolet (EUV) lithography tools. The plan is to use them as investment resources to expand production capacity to respond to the expansion of the AI memory market and to strengthen technological competitiveness.
The market is focusing on the possibility that, in line with these investment plans, SK hynix could generate dollar-selling demand as it secures won needed for domestic capital expenditures. Analysts say that in a domestic foreign exchange market where dollar supply-demand conditions are tight due to the recent strong dollar and increased overseas stock investment by domestic investors, the large-scale dollar raising has emerged as a new supply variable.
In fact, after news broke that an ADR issuance was being pursued, some analysis said expectations were priced in that SK hynix's potential future currency conversion could exert downward pressure on the won-dollar exchange rate.
The size of the funding is considerable even by the standards of the domestic foreign exchange market. The $26.5 billion is close to the $33.28 billion average daily transaction size of the onshore won-dollar spot market in the first quarter of this year, as compiled by the Bank of Korea. It is also nearly twice the roughly $13.6 billion in net dollar sales by the foreign exchange authorities in the first quarter to stabilize the exchange rate.
However, the entire $26.5 billion will not be supplied to the domestic foreign exchange market. The amount of funds that actually flow into the foreign exchange market will vary depending on the schedule for executing investments and demand for foreign currency payments. While currency conversion demand to secure won may arise in the course of investing in domestic production facilities, the funds could also be used for foreign currency payments related to importing overseas equipment, such as EUV lithography tools.