SK Hynix Halts Review of Solidigm US IPO After Regulator Warnings

SK Hynix said on Friday, October 23, that it is suspending its review of a pre-IPO fundraising round and a subsequent initial public offering for Solidigm, its U.S.-based NAND flash subsidiary, citing market conditions, the Korea Herald reported.

The company's explanation

SK Hynix said financial market volatility has risen and semiconductor stocks have corrected. It said its assessment of the economic benefits of an IPO, and of the need to support Solidigm's growth, had not changed, and that it will keep exploring other ways to raise shareholder value. The company said tighter government restrictions on duplicate listings were not the direct reason for the decision.

Regulatory and shareholder pressure

The move followed shareholder opposition and regulatory scrutiny over possible harm to minority shareholders. Lee Chan-jin, governor of South Korea's Financial Supervisory Service, said earlier in the week that the FSS and the Financial Services Commission viewed a Solidigm listing as subject to duplicate-listing restrictions. Solidigm sits in a holding chain of SK Inc., SK Square and SK Hynix, which raised concerns about a deeper holding-company discount.

Background

• Reports had said Solidigm was weighing a U.S. IPO as early as next year, at a valuation of up to $150 billion.
• SK Hynix had considered an IPO to bring in outside capital for new U.S. production facilities and to meet rising AI-era memory demand.
• Solidigm, based in California, was created in 2021 when SK Hynix acquired Intel's NAND flash and SSD business.
• The Korea Herald noted that Sandisk shares have fallen about 40% from their June peak, and analysts had questioned whether Solidigm could reach its expected valuation.

SK Hynix said the decision does not change its commitment to investing in Solidigm, and it is considering other funding options, including direct investment.