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SK hynix suspended its review of a Solidigm IPO on Oct. 23, citing market volatility, after Korean regulators flagged dual-listing rules. It has not said how it will fund a US fab.
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A Solidigm SSD from the company's website. Solidigm is SK hynix's US NAND flash and SSD subsidiary; the image is a product render, not a photo of a fab.
Image: Solidigm
Source · Press image from the Solidigm website, used for news reporting.
SK hynix said on Oct. 23 that it has suspended its review of a Solidigm US IPO, a listing for its NAND flash and solid-state drive subsidiary, citing financial market volatility and share price trends, according to Reuters.
The company said the decision does not reflect any change in Solidigm's growth prospects or investment needs. It added that it will keep exploring ways to fund the unit's expansion, including a review of the timing, scale and financing of future investments. Reuters had reported that the offering could raise as much as $15 billion.
Solidigm is based in the United States, and SK hynix said it needs to secure new production facilities there, according to Seoul Economic Daily. The parent said it had compared several routes, including direct investment and an IPO. An outside listing, it said, would have raised consolidated cash flow and left room for dividends and share buybacks.
That matters for AI infrastructure because Solidigm sells enterprise SSDs, the storage tier that sits next to GPU servers in AI data centers. The paper said the market had expected a Nasdaq listing as early as next year raising $10 billion to $15 billion, with valuation forecasts of up to $150 billion. With the IPO off, the US fab funding question is open again, and the money has to come from SK hynix itself or from another route it has not named.
Reuters said South Korea's financial regulator had warned earlier this week that the listing could breach the country's dual-listing restrictions. Financial Supervisory Service Governor Lee Chan-jin told a parliamentary hearing that regulators were examining whether it needed review under domestic rules.
SK hynix suspended its Solidigm IPO review on Oct. 23, days after Korean regulator remarks reported by Seoul Economic Daily; it reports Q3 results on Oct. 28.
Illustration (AI-generated)
Seoul Economic Daily reported that both the Financial Services Commission and the FSS judged the plan to run afoul of the dual-listing rules, and that the commission's chairman said parent companies SK Square and SK hynix had to protect shareholders. The paper also cited shareholder objections that a separate listing could create a valuation discount and dilute indirect stakes. SK hynix itself gave only market conditions as its reason. The paper reported that a pre-IPO round to bring in outside investors has also stopped, citing sources.
Reuters said SK hynix shares had fallen more than 30% since the potential IPO was reported in late September, against a 20% decline in the KOSPI benchmark. Shares were down 1.3% in morning trade on Oct. 23, against a 2.3% drop in the KOSPI. An analyst at Kiwoom Securities told Reuters the move could help sentiment toward chip stocks.
SK hynix is already spending heavily on memory for AI. Voltgrid has reported that Samsung and SK hynix are reportedly moving China fabs to 286-layer NAND, with Solidigm installing tools at a Dalian plant.
SK hynix has not said how it will pay for a new Solidigm fab in the US. It reports third-quarter results on Oct. 28, according to investingLive, which makes that the next point where management may outline funding and capital spending plans.
