SK hynix said on 1 October that it had made no decision on Solidigm’s future operation or financing, amid reports of a possible US IPO valuing the subsidiary at up to $150 billion.
Key points
- SK hynix says shareholder value will be a key consideration in any decision on Solidigm.
- Reuters reported that Solidigm had met investment banks about a potential US IPO as early as 2027.
- The Korea Corporate Governance Forum has called for the company to halt listing discussions.
Solidigm’s reported $150 billion IPO valuation
Solidigm is weighing a US listing at a valuation of up to $150 billion, or about 204 trillion won, Seoul Economic Daily reported. The proposed price would apply to a business whose revenue and operating profit are already consolidated into SK hynix’s results. Investors have raised concerns that separately listing the subsidiary while its parent remains listed could reduce the value of their SK hynix holdings.
Reuters reported that Solidigm had held meetings at which investment banks pitched for a role managing a potential IPO. The subsidiary could seek a US listing as early as 2027, according to that report. SK hynix said in its 1 October statement that it had made no specific decision on Solidigm. An earlier regulatory filing described a review of options to strengthen the subsidiary’s competitiveness.
AI Affairs previously reported Solidigm’s consideration of a US IPO at a valuation of up to $150 billion. The figure remains a reported possibility rather than a price set by a listing decision.
Solidigm came from Intel’s NAND flash memory and solid-state drive business, acquired by SK hynix under a $9 billion deal announced in 2020, Aju Press reported. The US-based subsidiary focuses on high-capacity enterprise SSDs for AI data centres. SK hynix says Solidigm is assessing investments to increase production capacity and improve its technology.
SK hynix weighs cash against outside capital
SK hynix said it has enough financial resources to pay for Solidigm’s investments itself, but that using its own cash would not necessarily be the best choice. Outside capital remains an option. The decision also sits alongside investment needs in high-bandwidth memory, server DRAM and enterprise SSDs, businesses competing for the chipmaker’s resources.
The company said memory production requires substantial capital and is exposed to industry cycles. It said market conditions, the timing of investment and its wider allocation of funds would therefore matter when choosing how to finance Solidigm. On outside funding, it said it would weigh the benefit of the capital against the financial consequences for the company and its existing shareholders.
“Whatever option we consider, how it affects the economic value held by existing shareholders will be an important criterion in our judgment,” SK hynix said, according to Seoul Economic Daily. The company said its board would closely examine the financial and business effects of any concrete plan, follow the applicable procedures and consider shareholder protections before proceeding.
Governance forum opposes a five-tier listing
The Korea Corporate Governance Forum has called on SK hynix to stop discussions of a Solidigm listing. It argues that taking the subsidiary public through the existing SK, SK Square and SK hynix ownership chain, together with a US entity, would produce a five-tier multiple-listing structure.
SK hynix said it would judge any funding route by its effect on long-term corporate and shareholder value. Its statement addressed both internal funding and external capital as options for Solidigm, which is considering investments to expand production capacity and improve its technology.
