SK Hynix halts plans for a U.S. IPO of its Solidigm memory-chip unit
South Korean chipmaker SK Hynix said Friday it has stopped reviewing a pre-IPO fundraising round and a U.S. stock listing for Solidigm, its flash-memory and solid-state drive subsidiary, citing market conditions, Yonhap reported. The move comes as investors pull back from AI-related stocks and after South Korean regulators raised concerns about the deal, Reuters reported.
What Solidigm does: Solidigm, based in California, makes NAND flash memory and solid-state drives, which store data in AI data centers, Yonhap reported. SK Hynix formed it in 2021 after buying Intel’s NAND and SSD business, according to Yonhap. A listing had been considered to help pay for a new U.S. factory, Reuters reported.
The size of the deal: People familiar with the plans had said the share sale could have raised $15 billion and valued Solidigm at $150 billion, according to Reuters. SK Hynix said the decision “does not reflect any change in Solidigm’s growth prospects or investment needs,” Reuters reported.
Why it stopped: The Wall Street Journal reported that the decision highlights growing investor caution about AI valuations. South Korea’s financial regulator had been examining whether the listing would fall under the country’s rules restricting dual listings, which aim to protect existing shareholders, Reuters and The Korea Times reported. Industry sources told The Korea Times that government warnings may have weighed more heavily than market conditions; the company cited market conditions.
Market reaction: SK Hynix shares closed 4.4% higher in Seoul on Friday after falling as much as 3% earlier in the session, CNBC reported. The company said it will keep looking at other ways to fund Solidigm’s growth, according to Yonhap.
Sources
- Yonhap News Agency — SK hynix halts review of Solidigm U.S. IPO
- Reuters (via Investing.com) — SK Hynix puts US IPO of chip unit Solidigm on hold after Seoul authorities raise concerns
- CNBC — SK Hynix shares jump over 4% after early losses as chipmaker scraps Solidigm IPO plans
- The Korea Times — SK hynix halts Solidigm IPO plan amid regulatory pressure
- The Wall Street Journal — SK Hynix Pauses IPO of Memory-Chip Unit Solidigm as AI Valuation Fears Mount