South Korea Just Bet $20 Billion on SK hynix Stock

SK hynix (SKHY) stock was among the hottest stories in the chip sector this year. The South Korean memory maker pulled off a record-breaking listing in the United States this summer, and the proceeds were massive.

Valued at a market cap of almost $900 billion, the Korea-based chipmaker has surged 1,400% over the last five years. However, it is also down over 40% from all-time highs.

Here is what is behind the SK hynix stock price surge and the surprising move South Korean officials made once the dollars started flowing in.

SK hynix Stock Price Jumped After Record Nasdaq Debut

SK hynix priced its American depositary receipts at $149 apiece in July, raising roughly $26.5 billion for the chipmaker's expansion plans, which include new factories and equipment, according to CNBC .

It was the largest U.S. share offering ever completed by a foreign company. Investors moved fast once trading opened, given SKHY stock jumped 13% on its first day, closing at $168.01.

SK hynix trails only Samsung as South Korea's most valuable company. Like Samsung (SMSN.L.EB), it builds memory chips that store data in phones and computers and, increasingly, in AI servers. Big tech giants such as Nvidia (NVDA) and Apple (AAPL) are among its customers.

Chairman Chey Tae Won told CNBC the listing felt like a dream come true. He said customers keep asking for more chips even after SK hynix pledged to double its production capacity within five years, telling CNBC that clients still say, "We need more."

Much of that demand centers on high bandwidth memory, known as HBM, a specialized chip that powers Nvidia's AI accelerators. SK hynix leads that market, and Tae Won said he sees no signs of a slowdown in HBM orders.

Here is the new development. South Korea's Foreign Exchange Stabilization Fund purchased about $20 billion in U.S. dollars from SK hynix in July, Reuters reported, citing a source with direct knowledge of the matter. The finance ministry and the Bank of Korea, Korea's central bank, jointly run the FX fund. The dollars originated from proceeds SK hynix brought back to Korea after its ADR listing. Reuters said the purchases were made through over-the-counter transactions.