SEOUL — South Korea's Foreign Exchange Stabilization Fund purchased roughly $20 billion in U.S. dollars that SK Hynix converted back to won after completing the largest American depositary receipt offering ever by a foreign company, a source with direct knowledge of the transactions said Wednesday. The purchases were made through over-the-counter deals as the chipmaker moved the capital home.
The fund, jointly managed by the finance ministry and the Bank of Korea, does not publicly disclose its asset breakdown or current size. Its involvement as the primary buyer of the repatriated dollars had not been previously reported. SK Hynix, the finance ministry and the Bank of Korea all declined to comment.
SK Hynix's ADR listing in July raised $26.5 billion on Wall Street, a record for any foreign issuer in the United States. The company said it intended to use the proceeds to build new factories and purchase equipment to meet rising demand for AI memory chips. The repatriation of those dollars—converting them to won on the domestic market—was widely anticipated. Who absorbed the currency flow was not.
The mechanism the fund used differs from the kind of open-market intervention South Korean authorities have historically employed to defend the won. Rather than selling dollars directly into the foreign exchange market to support the currency, the fund absorbed the incoming dollar supply through bilateral, over-the-counter transactions. That approach allowed authorities to build their dollar reserve position without the market disruption a large open-market sale would have caused.
South Korean authorities had spent aggressively to prop up the won through much of 2025, depleting the dollar holdings inside the stabilization fund. By stepping in as the buyer of SK Hynix's repatriated dollars, the fund replenished those depleted reserves while simultaneously preventing the $20 billion inflow from flooding the domestic foreign exchange market and pushing the won sharply higher in an uncontrolled way.
The won's recent performance underscores the currency's pressure. The dollar-won rate fell to near 1,550 in late June—a 17-year low for the Korean currency—as the won ranked among Asia's worst performers in 2025. In the two months since, the won has recovered more than 12 percent against the dollar. The stabilization fund's dollar purchases, by absorbing the Hynix inflow without letting it drive the exchange rate, helped manage the pace of that recovery.
The Foreign Exchange Stabilization Fund carried an operational balance of 135.1 trillion won—equivalent to roughly $98.7 billion—under a plan confirmed by the National Assembly in the prior budget cycle. The government's new budget proposal, released Tuesday, projects the fund at approximately 106.5 trillion won, a reduction that reflects the drawdown from months of intervention activity. The fund holds only U.S. dollars and Korean won; analysts have assessed that the dollar share dropped sharply following the central bank's sustained intervention campaign.
SK Hynix is the world's second-largest memory chip maker by revenue and the dominant supplier of high-bandwidth memory chips used in AI accelerators, including those built by Nvidia. Its July listing gave it a large pool of dollar-denominated capital to fund manufacturing expansion at a moment when AI server demand has strained global chip supply. The company's decision to repatriate the funds reflected its intention to spend the money domestically on new fabrication capacity.
Absorbing $20 billion in a single coordinated purchase through bilateral deals represents a structurally different approach to South Korean foreign exchange operations. It used a private-sector capital event as an opportunity to rebuild state reserves without a visible market footprint.
