Original | Odaily Planet Daily (@OdailyChina)

Author | Azuma (@azuma_eth)

The listing process of SK Hynix in the United States has entered its final stage, but on the eve of this South Korean storage giant debuting on Nasdaq, the narratives in AI and the semiconductor industry have suddenly experienced a drastic shift in sentiment.

On the evening of July 1, "Meta may release excess computing power" stirred speculation about major companies potentially cutting capital expenditures, leading to severe market fluctuations. As the narrative of AI computing power being "absolutely scarce" began to loosen, the semiconductor storage chip sector suffered a direct blow, with related concept stocks experiencing a massive downturn in the secondary market — SK Hynix's stock in Korea plunged 14.57% at closing, wiping out over a hundred billion dollars in market value in a single day.

• Odaily Note: For reference, see "Has the 'biggest negative news' for chip stocks finally arrived? Will Meta be the first major company to cut capital expenditures?".

Countdown to SK Hynix's U.S. Listing

On June 30, SK Hynix submitted its F-1 prospectus to the U.S. Securities and Exchange Commission (SEC), intending to list on Nasdaq by issuing American Depositary Receipts (ADRs), with a fundraising target of approximately 45.45 trillion won (about 29.4 billion USD), which is expected to be one of the largest ADR issuances in history. All proceeds from this fundraising will be used for domestic capacity expansion in South Korea, including the Yongin wafer fab, the Cheongju advanced packaging production line, and investments in EUV and related equipment.

• Odaily Note: An ADR is essentially a vehicle for trading non-U.S. companies in the U.S. stock market. ADRs are not directly issued by the company as U.S. stocks but are "substitute securities" issued in the U.S. by the custodian bank, corresponding to the common stock of foreign companies. Investors can trade overseas company stocks in U.S. dollars in the U.S. market through ADRs, without needing to open cross-border accounts or deal with foreign exchange and settlement processes.

The transaction is co-underwritten by Bank of America, Citigroup, Goldman Sachs, and JPMorgan Chase, with a total of 17.79 million new shares to be issued (accounting for 2.5% of its total issued share capital), with the stock code SKHY. In terms of timing, the ADR is expected to begin trading on Nasdaq on July 10.

SK Hynix's decision to actively promote its U.S. listing during the current cycle is essentially a result of the resonance of the industrial cycle, capital window, and competitive structure.

First, SK Hynix is currently in a historically prosperous business cycle. Driven by demand for AI servers, high-bandwidth memory (HBM) has become the most critical supply bottleneck, with the company holding over 50% market share in this area, which has also propelled its overall DRAM business into a high-profit phase. This has synchronized the company's performance and stock price into an upward channel, forming a typical "high-cycle financing window" — conducting large-scale capacity expansion financing during the strongest phase of fundamentals.

Secondly, from the perspective of capital market structure, the U.S. market remains the main pricing center for global AI assets. Whether it's Nvidia, AMD, or Micron and other storage chip companies, the U.S. stock market overall provides significantly higher valuation centrality and liquidity premium to the AI industry chain. In contrast, the Korean market has long experienced what is termed "Korean discount," where similar semiconductor assets are generally valued lower than their U.S. counterparts. Therefore, one of the core significances of SK Hynix issuing ADRs in the U.S. is the hope to bring the company into a higher valuation system for repricing.

Finally, storage giants are in fierce capacity expansion competition, and expansion of capacity heavily depends on ongoing massive capital investment. SK Hynix's nearly 30 billion USD financing will be entirely used for wafer fab, advanced packaging, and equipment expansion, essentially seeking to convert capital advantages into production advantages.

With such a drop, can Hynix still be bought?

Initially, SK Hynix's U.S. listing could be seen as a historic moment for the storage industry, but the recent sharp correction that began last night has injected significant uncertainty into its future. Should one take the opportunity to buy at the bottom, waiting for a rise after the U.S. listing? Or should one decisively reduce positions to avoid potential bubble bursts?

To be clear, the following section represents personal opinions and does not constitute investment advice.

In my personal view, this round of rapid decline for SK Hynix, including the significant correction in the sector, is closer to a liquidity crunch driven by emotional amplification rather than a fundamental reversal in industrial trends.

First, let's focus on the news that triggered this — "Meta may release excess computing power," which itself has been subject to overinterpretation.

When Bloomberg first reported this news, the headline was "Meta is Building a Cloud Business to Sell Excess AI Compute," but it was later changed to "Meta Plans to Build a Cloud Business to Sell AI Computing Power." Other media, including Reuters, initially reported using the first headline.

The key changes between the two headlines are twofold: first, the change from "is building" to "plans to build," which directly weakens the certainty and timeliness of the report; and second, the removal of the term "excess," although the initial statement could easily be interpreted by the market as "computing power has become excess," thus forming a chain reaction of "excess computing power → capital expenditures peaking → AI demand weakening," ultimately causing market panic.

Even hypothetically, even if it is confirmed that Meta is indeed going to sell computing power, it is still hard to constitute a sufficient reason to conclude that the "AI capital expenditure cycle" has ended. From an industrial logic standpoint, Meta is relatively lagging in the AI race, and the pressures it faces in foundational models and computing efficiency objectively determine that Meta has a certain need for computing power scheduling and asset optimization. In this context, externalizing or commercializing some computing resources is more akin to an asset utilization optimization action rather than a systemic contraction on the demand side.

This type of "computing power redistribution" is not uncommon in the AI industry chain; two months ago, SpaceX also engaged in commercial cooperation by externalizing part of its computing resources (for example, leasing to Anthropic), which is fundamentally about cost and resource efficiency rebalance, not a denial of AI demand itself. Therefore, extrapolating the uncertain scale of a single company's computing power scheduling actions directly to "industry excess" has a clear logical leap.

As for why the impact of this news is so significant, another key reason lies in market structure. Before this drop, the semiconductor storage chip sector was already at a relatively high level, with high concentration of trend funds and leveraged ETFs. In such a structure, the market's sensitivity to marginal information significantly increases; once a narrative shock occurs, it can easily trigger amplified deleveraging and passive position reduction, thus magnifying what would have been a "level of expected adjustment" volatility into a "level of price crash" retreat.

Therefore, this correction is more like a typical result of "emotional panic + structural deleveraging" combined, and I personally tend to take the opportunity to increase positions in this downturn.

After all, SK Hynix is currently in a key window period for its U.S. listing with nearly 30 billion USD in fundraising scale; both the underwriters and institutional subscribers participating should hope that the stock price does not perform too poorly after the listing.

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