SK Hynix, a memory chip producer from South Korea and a competitor to Samsung and the U.S.-based Micron, is set to offer nearly 17.8 million shares in an IPO in the U.S., according to a statement made by the company on Monday. If the shares perform well (which appears likely), the company could potentially secure around $28 billion, based on the share price of SK Hynix at the close last Friday in Seoul, as reported by Bloomberg.

The company will issue American depositary receipts (ADRs), which are certificates allowing U.S. investors to acquire foreign stocks without engaging in trading on international exchanges directly. Each ADR will correspond to one-tenth of a common share. Pricing for these securities is projected for Thursday, with trading anticipated to begin on Friday.

Similar to Micron, SK Hynix is benefiting from a surge driven by AI, reflected in both sales figures and stock valuation. They reported almost a 200% increase in revenues for the first quarter compared to the same quarter from the previous year, and their stock has risen about 260% thus far in 2023. This is due to the high memory demands of AI operational systems. As major companies like Amazon, Microsoft, Google, and Oracle strive to develop AI facilities and as new AI data centers proliferate across the country, demand is surpassing supply, leading to a shortage of memory chips — including high-bandwidth memory (HBM), DRAM, and NAND (which are the various types of chips that are utilized for data storage and transfer within AI systems). This scenario has been labeled as “RAMageddon.” Executives at Apple have indicated that the shortage is prompting them to increase prices on Mac computers and iPads.

South Korean tech firms, spearheaded by SK Hynix and Samsung, have committed to invest over $550 billion in developing new manufacturing capabilities to meet the rising demand. However, this investment is considered risky. By the time these facilities are operational, the memory requirements for AI may evolve, potentially resulting in excess supply and a subsequent drop in prices. Nonetheless, currently, Wall Street is on the lookout for another Nvidia, and memory chip manufacturers are among the most viable candidates available.

Micron, the most comparable U.S. entity, has soared nearly 700% within the past year, attaining a valuation exceeding $1 trillion, driven by unprecedented memory demand and revenue propelled by AI.