SK Hynix receives unprecedented lock-in offers from tech giants

According to six informed sources cited by Reuters, global tech giants are launching an unprecedented "wooing offensive" against Korea's storage chip behemoth SK Hynix, competing to propose various schemes such as investing in factory construction and funding equipment purchases, with the intention of securing in advance the production capacity of high-bandwidth memory (HBM) chips required for artificial intelligence.

Two Unprecedented Types of Offers

According to informed sources, the proposals made by tech companies to SK Hynix mainly cover two categories: one is direct investment in the construction of dedicated storage device production lines; the other is financing for SK Hynix to purchase chip manufacturing equipment, such as ASML's extreme ultraviolet (EUV) lithography machines, which are worth hundreds of millions of dollars and are essential key equipment for printing miniature circuits on silicon wafers.

The insiders said that one of the proposals targets the first phase of a large wafer factory that SK Hynix is building in the Yongin complex in Korea, which is likely to center around DRAM as the core product. It is currently unclear which tech companies have made the above offers. Major U.S. tech companies such as Alphabet, Meta, and Microsoft all announced plans last week to significantly increase investment in AI infrastructure.

SK Hynix's Prudent Attitude

Despite the tempting offer prices, two sources pointed out that SK Hynix is currently taking a cautious stance. The company worries that such financial commitments could lead to being "held hostage" by specific buyers, forcing them to trade lower prices for long-term stable income guarantees. One source said bluntly: "No matter what terms are offered, the current production capacity is essentially zero, and we can't even allocate a small portion of the capacity to specific customers at present."

SK Hynix refused to disclose the specific terms of the negotiations with customers but stated that "we are thoroughly reviewing various methods and structural alternatives, which are different from traditional long-term agreements".

AI Arms Race Driving Valuation Restructuring

This situation reflects the extreme desire for storage chips behind the competition of computing power in the AI era. SK Hynix is a major global supplier of HBM chips, and SK Hynix's supply occupies an important share in the high-end memory配套 of Nvidia's AI accelerator chips.

At the same time, SK Hynix is advancing plans to go public in the United States. The company has secretly submitted the F-1 form to the U.S. Securities and Exchange Commission (SEC), intending to complete the listing as early as June to July this year, with a financing scale of up to 14.4 billion U.S. dollars, and the funds raised will mainly be used for the expansion of Yongin production capacity and the construction of an advanced packaging factory in Indiana, USA. Previously, SK Hynix had announced the purchase of about 8 billion U.S. dollars worth of EUV lithography machines from ASML.