Expectations are growing that SK hynix (000660.KS) could win a Micron-level valuation after listing its American depositary receipts (ADRs) in the United States. However, some analysts caution against blindly expecting the valuation to rise, noting that Taiwan's TSMC frequently sees a price gap of more than 10% between its U.S. ADRs and its home-market shares.
According to Investing.com, TSMC's ADRs listed on the New York Stock Exchange closed at $434.16 on the 2nd, the most recent trading day. The same day, its home shares on Taiwan's Taipei exchange closed at NT$2,465. For TSMC, five home shares correspond to one ADR. Factoring in that day's exchange rate (NT$31.90 to the dollar), the ADR price was 12.37% higher than the home shares. According to Bloomberg data, the price gap between TSMC's home shares and ADRs peaked at 26% last December, then narrowed to 17% in April and 13.7% in May this year, but still remains above 10%.
ADRs typically command a price premium over home-market shares in various countries, thanks to the high accessibility of the U.S. market. Some analysts attribute TSMC's widened price gap to the closed nature of the Taiwanese market, which concentrated global passive funds and buying by U.S. retail investors on the U.S. ADRs. In contrast, the Korean market is seen as more open than Taiwan's. Korea is expected to allow easier mutual exchange between home shares and ADRs through the Korea Securities Depository compared with Taiwan. In addition, "foreign integrated accounts" have recently been introduced one after another through collaborations such as the Samsung Securities-IBKR partnership, creating a structural detour for supply and demand.
SK hynix plans to list its ADRs on the Nasdaq on the 10th at a scale of $28.1 billion (43.14 trillion won). This is expected to be the largest ever for a foreign company listing in the United States, surpassing Alibaba ($25 billion) and Aramco ($25.6 billion). In particular, the company will secure eligibility not only for regular trading but also for inclusion in major indexes such as the Nasdaq 100, raising expectations for mechanical buying demand from exchange-traded funds (ETFs) that track them.
The market is pinning hopes on a rerating of SK hynix immediately after the ADR listing. Based on the closing price that day, SK hynix's forward price-to-earnings ratio (PER) for 2026 is 7.42 times, while Micron's is 9.44 times, a wide gap. The interpretation is that there is no reason for SK hynix to be relatively undervalued, given that Micron is the third-ranked memory maker.
On the other hand, some remain cautious, arguing that it is too early to be optimistic about an immediate rerating and reflected gains for the domestic stock market when accounting for the traditional ADR price premium. "Considering domestic supply and demand conditions, it will be difficult for SK hynix to immediately win a Micron-level valuation," a securities firm official said.
