Semiconductor giant SK hynix Inc. is poised to significantly bolster South Korea’s foreign exchange market, with industry sources on Sunday anticipating a substantial influx of U.S. dollars following its successful American Depositary Receipt (ADR) offering on Nasdaq, which raised approximately 40 trillion won ($26.5 billion).
These substantial proceeds from the U.S. listing are slated for payment to SK hynix by Monday, marking a key financial milestone.
With SK hynix committing the majority of these funds to strategic domestic investments, particularly the ambitious Yongin semiconductor cluster project, a significant portion of the dollar-denominated capital is projected to undergo conversion into Korean won. This conversion is expected to substantially increase the supply of U.S. dollars within South Korea’s local foreign exchange market.
Sources indicate this considerable inflow of dollars is anticipated to alleviate ongoing pressure on the Korean won, which has recently struggled against a strong U.S. dollar, exacerbated by global dollar strength and increasing outbound investments from other Korean enterprises.
An SK hynix official, however, noted that “The precise size and timing of these significant foreign exchange transactions are still pending final determination.”
Financial market experts are drawing parallels between this anticipated dollar inflow and the massive $60 billion dollar liquidity injection provided by the currency swap deal between the Bank of Korea and the U.S. Federal Reserve during the height of the 2020 COVID-19 market turmoil, underscoring the potential impact.
