SK hynix abandons Solidigm's US IPO, a listing once mooted at up to $150 billion

Shareholders of SK hynix now have one less source of uncertainty hanging over them. The worry had been that a US listing would eat into the parent group's economic stake and widen the holding-company discount at a conglomerate that already contains a number of traded units. With that threat lifted, the stock, down roughly 30% from late September and hovering near six-month lows, could get some support. The retreat also points to a tighter market for big AI hardware floats, in the wake of this month's sell-off in chip stocks and the disruption surrounding neocloud funding. Attention now shifts to third-quarter earnings due next week and to the funding path SK hynix will pick to keep Solidigm expanding.

By shelving Solidigm's US listing, SK hynix has removed a dilution concern for its own investors; chip valuations had fallen and made the moment unattractive, but the unit's financing question remains open.

Summary:

• A US IPO for Solidigm — SK hynix's NAND flash and solid-state drive unit based in the US — is no longer being pursued.
• The parent said the listing review was terminated, citing market conditions and trends in share prices.
• SK hynix added that Solidigm requires fresh capital to grow and that other options for boosting shareholder value remain under consideration.
• Recent reports floated a potential 2027 IPO that could put Solidigm's worth at as much as $150 billion and bring in $10 billion–$15 billion, with Goldman Sachs and Morgan Stanley said to have been selected as lead banks.
• SK hynix's stock has dropped steeply since late September, in part because investors fretted that a standalone listing would dilute those already holding shares.
• Third-quarter numbers are scheduled to be released by SK hynix on October 28.

The decision to abandon a US IPO for Solidigm — the NAND flash memory and solid-state drive subsidiary — was announced by SK hynix, which pointed to market conditions and share price movements.

While confirming that its listing review had come to an end, the South Korean semiconductor company emphasized that Solidigm remains in need of funding for growth. It also said it would keep assessing alternative ways to create value for shareholders. South Korea's Korea Economic Daily broke the story on Friday.

This brings a halt to preparations that had been accelerating. In late September, Reuters said Solidigm was mulling a US listing as soon as 2027, with a possible valuation of up to $150 billion and proceeds as high as $15 billion — a deal that would have ranked as the largest US semiconductor listing. Then, in early October, Bloomberg reported that Goldman Sachs and Morgan Stanley had been selected to manage a roughly $10 billion offering, which would have been paired with a pre-IPO fundraising. Throughout, SK hynix maintained that nothing was settled and that it would take into account the effect on existing shareholders.

Shareholder anxiety seems to have played a decisive role. Solidigm occupies the lowest rung in a ladder of listed companies under the SK group, and the market's fear was that a standalone US listing would reduce SK hynix's economic exposure to the unit and make the holding-company discount even steeper. Since the end of September, SK hynix stock has lost about 30% and come close to six-month lows, pressured by worries over AI investment returns, memory-chip competition and the Solidigm question. On Thursday, the Seoul-traded shares declined roughly 5.5%.

The environment for listings has turned cooler as well. This week brought the steepest one-day slide for chip stocks since June, on fresh worries about AI expenditure, and financial strain at AI infrastructure companies has left investors pickier when it comes to hardware businesses that need heavy capital.

Solidigm, headquartered in Rancho Cordova, California, came out of Intel's NAND and SSD operations, purchased by SK hynix under a 2020 agreement valued at roughly $9 billion. The company produces enterprise solid-state drives, product lines that are seeing robust orders as AI data centres add storage capacity.

How that expansion gets financed is left unanswered by the company's announcement. Now that the IPO is off the table, investors will be watching SK hynix's October 28 third-quarter report for hints about options, including direct backing from the parent or private investors.