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Chipmaker SK Hynix to raise £791m bond deal

Written by Wed 3 Jan 2024

Image Credit: Reuters

The world’s second-biggest memory chipmaker, SK Hynix, said it aims to raise £791.7 million ($1 billion) in a bond deal, according to sources familiar with the matter.

Reuters reported SK Hynix said the issue amount has not been finalised and will be decided later, considering market conditions.

The company has enlisted eight investment banks to handle the deal, as per a Reuters-reviewed term sheet. The deal may involve bonds with three- and five-year maturities.

Throughout Q1 to Q3 the semiconductor firm reported combined operating losses of £4.87 billion ($6.19 billion). This was attributed to an extended slowdown in the demand for commodity chips used in computers and smartphones.

This year, the value of memory chips are anticipated to rebound. The expected recovery is attributed to production cuts put in place by chipmakers. When supply decreases due to production cuts, it can increase prices.

SK Hynix is expected to redirect its resources to maintain its leadership in high bandwidth memory (HBM) chips used in Generative AI.

HBM chips are a type of computer memory designed to offer high-bandwidth and low power consumption. The first HBM memory chip was produced by SK Hynix in 2013.

In April 2023, SK Hynix raised £1.3 billion ($1.7 billion) through its first convertible bond sale in a decade. The chipmaker planned to use the funds from the bond sale to support operational needs, including the acquisition of chip production materials. The bond was convertible into 20.1 million shares which was equivalent to a 2.8% stake.

In November, NVIDIA unveiled a new HBM offering, the NVIDIA HGX H200, based on its Hopper architecture. The H200 is notable for being the first GPU to incorporate HBM3e, offering faster and larger memory capabilities.

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Written by Wed 3 Jan 2024

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