South Korea's FX Fund Bought $20 Billion of SK Hynix's Repatriated Dollars

South Korean foreign-exchange authorities bought about $20 billion of the dollars that SK Hynix repatriated following its blockbuster American depositary receipt listing in July, according to a source with direct knowledge of the matter cited by Reuters.

The purchases were made by the Foreign Exchange Stabilization Fund, which is jointly overseen by the finance ministry and the Bank of Korea, through over-the-counter deals as the chipmaker converted its Wall Street proceeds back into won. The source, who spoke on condition of anonymity given the sensitivity of the matter, said this marks the first time the ultimate buyer of the bulk of SK Hynix's repatriated funds has been identified publicly.

SK Hynix's July share sale in New York raised $26.5 billion, the largest U.S. stock offering ever by a foreign company, with the memory chipmaker saying it would use the proceeds to build new fabs and buy equipment to meet booming demand for AI-related chips. Officials at SK Hynix, the finance ministry and the central bank all declined to comment on the transaction, Reuters reported.

Analysts say the intervention differs from Seoul's traditional playbook of defending the won by selling dollars. Instead, by absorbing the inflow of greenbacks from SK Hynix, authorities appear to be trying to limit excessive won appreciation while simultaneously topping up a stabilization fund that market watchers believe has seen its dollar holdings shrink sharply after months of currency defense.

South Korea does not publicly disclose the exact composition or current size of the fund, a sovereign pool made up entirely of dollars and won. Under an operating plan approved by the National Assembly last year, the fund stood at 135.1 trillion won, equivalent to about $98.7 billion; the government's newly unveiled budget proposal projects it will shrink to roughly 106.5 trillion won.

The dollar-won exchange rate has swung sharply in recent months. It touched a 17-year low near 1,550 won per dollar in late June before the won rallied more than 12% over the following two months, a recovery that lifted the currency from among the worst performers in Asia this year.

The disclosure adds a new dimension to how Seoul is managing the surge of foreign capital tied to the country's semiconductor boom, as AI-driven demand continues to reshape both corporate financing strategies and the broader currency market.