One of the world’s leading memory chip manufacturers is preparing to carry out a deal on the American stock exchange that could become one of the largest listings in its history. Investor applications have already far exceeded the offered volume—a rare sight even for the overheated artificial intelligence semiconductor segment.
Deal Size Increased During Preparation Process
The company intends to place nearly 178 million depositary receipts on Nasdaq. Initial estimates put the amount at about $26.5 billion, but as the deal progressed, the figure in updated documentation rose to nearly $28 billion. Such growth at the preparation stage is rare and itself serves as an indicator of strong investor interest.
Over the past twelve months, the manufacturer’s shares on its home exchange have multiplied in value, pushing its capitalization past the trillion-dollar mark and bringing it closer in scale to its main American competitor in the industry.
Why Depositary Receipts Are Back in Fashion for Asian Issuers
The ADR mechanism allows American investors to invest in a foreign company without opening an account on a foreign exchange—essentially, the foreign security trades as a local one. For the company itself, it’s a way to access capital from large funds that technically cannot or do not want to work directly on Asian markets.
This instrument remained a key financing channel for Asian businesses for a long time, but lost much of its appeal after the case of a Chinese ride-hailing service that listed in the US a few years ago and almost immediately faced severe pressure from its own national regulators. That episode made many Asian companies avoid such structures for quite some time.
Notably, almost simultaneously, Japanese memory maker Kioxia is preparing a similar entry to the American market—its shares on the domestic exchange have soared dozens of times over the year. Both players are clearly rushing to seize the moment while demand for artificial intelligence infrastructure remains high.
A separate detail: formally, this is not the company’s initial public offering. SK Hynix has long been listed on its home exchange, so the New York deal technically only adds a second, American, listing to the existing one.
Who Organizes the Deal and How Commissions Are Structured
The main organizers are the four largest American banks, with several other financial institutions playing less significant roles. The total compensation for the organizers could exceed $140 million—this includes the standard underwriting fee from the raised funds plus an additional premium from the issuer itself.
Such a commission seems small for a deal of this scale, and the reason is clear: the larger the placement, the lower the relative share of intermediary compensation, and a company with a trillion-dollar capitalization does not need banks to convince the market of its prospects from scratch. An important feature: the mechanism for additional issuance in case of high demand is not used here, meaning even continued oversubscription will not increase the final commission amount beyond the pre-agreed level.
A separate source of income appears for the deal’s depositary bank—this structure will service all issued receipts, earning income from converting securities between forms and from processing dividend payments.
Largest Contenders for a Share in the Placement
Among the declared participants are a well-known investment fund and a large asset management company, both expressing readiness to buy up to a quarter of the total offered volume. For a deal of this scale, this is an exceptionally significant bid—the distribution of the remaining book among other contenders will become a separate competition.
If the company completes the entire planned volume, the placement will match one of the largest public offerings in world history—Saudi oil company’s IPO a few years ago attracted a comparable amount and still serves as a benchmark when comparing the planet’s largest listings.
The Deal’s Place Among the Largest Asian Listings on Wall Street
For the organizers, the final fee will be among the most impressive payouts ever received from an Asian company for a single deal. For comparison: in 2014, a Chinese tech giant raised a quarter of a trillion dollars on Wall Street, and banks earned about $300 million from that placement—with a lower relative commission rate, the current deal could surpass that amount simply due to the larger capital volume.
Technical Nuances and Concerns of Emerging Market Regulators
Servicing the ADR structure requires constant operational effort: strict compliance with the depositary bank’s regulations, maintaining the correct ratio between the American receipt and the ordinary local share, as well as a well-established mechanism for converting securities from one form to another.
There is also a broader context beyond the specific deal. Regulators in several emerging economies have expressed concern that such listings can draw capital away from domestic markets, affect the national currency exchange rate, and undermine efforts to strengthen their own stock exchanges. The mass entry of the largest national industry leaders onto foreign exchanges is a double-edged tool: it gives companies access to global capital but at the same time takes some of the most liquid and attractive securities away from the home market.
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