[Edaily Reporter JAEMIN SONG ] SK hynix has decided to halt its consideration of an initial public offering (IPO) for Solidigm, its U.S.-based NAND flash subsidiary. Although the plan was intended to secure funding for new production facilities in the U.S. to meet growing demand for artificial intelligence (AI) memory, the company concluded that it should prioritize existing shareholder value, taking into account recent financial market volatility and stock price trends. However, as the need to expand Solidigm’s production capacity remains, the company plans to explore alternative financing options.

SK hynix announced on the 23rd through an official clarification filing that it is suspending its review of a pre-IPO funding round and an IPO for Solidym. The company explained, “Considering recent capital market conditions and stock price trends, we determined it necessary to reevaluate whether an IPO at this time is the most advantageous option for SK hynix and its existing shareholders.”

Previously, Solidym had drawn market attention following rumors in August that it was pursuing a pre-IPO worth approximately 5 trillion won, and last month, speculation arose regarding a potential listing on the U.S. stock market. There were even predictions that it could list on the U.S. stock market as early as next year and achieve a corporate valuation of up to $150 billion (approximately 210 trillion won).

However, as news of a potential separate listing spread, concerns arose among SK hynix’s existing shareholders regarding a discount on corporate value and erosion of shareholder value resulting from a dual listing. In response, SK hynix issued a separate statement on the 1st of this month, emphasizing that Solidigm’s funding method had not yet been finalized and that it would prioritize long-term shareholder value above all else.

At the time, SK hynix stated that it would thoroughly review the impact on existing shareholders’ economic value by comparing options for attracting external capital with those involving the injection of its own funds. Subsequently, as volatility in global financial markets increased and semiconductor companies’ stock prices underwent a correction, the company ultimately decided to suspend its consideration of an IPO.

Solidigm is a U.S. subsidiary established when SK hynix acquired Intel’s NAND flash business in 2021. It specializes in high-capacity enterprise solid-state drives (eSSDs) used in AI data centers, and its business growth opportunities are expanding in line with recent increases in investment in AI infrastructure.

The need to expand production capacity in response to this growing demand was also a key factor behind SK hynix’s consideration of an IPO. The company determined that its existing production facilities alone were insufficient to meet rising memory demand, making it necessary to secure new production facilities in the U.S. Consequently, SK hynix has been evaluating various options, including direct investment and raising external capital through an IPO.

Raising external capital through an IPO would reduce SK hynix’s own investment burden while improving its consolidated cash flow. The company explains that this would also expand the funds available for new facility investments, dividends, and shareholder returns such as share buybacks and cancellations. There were also expectations that the market’s separate valuation of Solidigm’s growth potential could enhance SK hynix’s corporate value.

However, with the IPO review suspended, securing funding for the new U.S. production facility remains a challenge for the future. Since the need to expand production capacity to meet growing demand for AI memory remains unchanged, SK hynix is expected to comprehensively review the timing, scale, and financing methods for the investment.

SK hynix stated, “Solidigm’s growth potential and the need for investment have not changed,” adding, “We will review the timing, scale, and financing methods of the investment and continue to explore various measures that can simultaneously enhance Solidigm’s growth and the interests of existing shareholders.”