SK hynix halts review of Solidigm IPO ... “Shareholder interests a priority” (Roundup)

[Financial News] SK hynix has decided to halt its review of a pre-IPO and initial public offering (IPO) for Solidigm, its U.S. grandchild company. With volatility in capital markets rising recently and semiconductor stocks undergoing a correction, the company concluded that it needed to reconsider whether raising funds through a listing would be a favorable option for enhancing shareholder value.
However, it plans to continue expanding Solidigm’s NAND flash (NAND) production capacity and investing in growth to meet rising demand for artificial intelligence (AI) memory. 
On the 23rd, SK hynix said in an official statement, “We are halting our review of a pre-IPO and initial public offering (IPO) for Solidigm.”
SK hynix said, “This is not because Solidigm’s growth prospects or need for investment have changed,” adding, “Considering recent capital-market conditions and share-price trends, we concluded that we need to reassess whether an IPO at this time is the most advantageous option for SK hynix and its existing shareholders.”
SK hynix had previously been considering securing a new production facility for Solidigm in the United States to meet rising memory demand in the AI era. The company believed that existing facilities alone would be insufficient to keep up with growing demand. It therefore compared various options, including direct investment and raising external capital through an IPO, to secure the funding needed to build a new plant and allocate capital efficiently. 
In particular, the company expected that raising external capital through an IPO would improve SK hynix’s consolidated cash flow while also giving it greater capacity for capital investment and shareholder returns, including dividends and share buybacks and cancellations. It also considered that having the market value Solidigm separately could highlight growth potential that was not fully reflected in SK hynix’s corporate value. 
However, the company reportedly reassessed the merits of pursuing an IPO as financial-market volatility rose recently and semiconductor stocks broadly underwent a correction. Although SK hynix and Solidigm have continued to post solid business results, the company believes that pursuing a listing at this point may not be the best option for existing shareholders. 
Separately from halting its IPO review, the company plans to continue expanding Solidigm’s production capacity and strengthening its competitiveness. It maintains that the need for new investment to keep pace with growth in the AI memory market remains.
SK hynix said, “Expanding Solidigm’s production capacity and strengthening its competitiveness remain important tasks,” adding, “We will continue to explore various options to advance both Solidigm’s growth and the interests of existing shareholders, while reviewing the timing and scale of investment and how to fund it.” 
Meanwhile, financial authorities had previously said that a U.S. listing of Solidigm would fall under restrictions on dual listings. 
The previous day, Financial Services Commission Chairman Lee Eog-won said at the National Assembly’s National Policy Committee’s comprehensive audit that Solidigm’s U.S. listing would be subject to the dual-listing guidelines. He said, “They apply to both overseas and domestic listings,” and explained that SK hynix and SK Square, as parent companies, must fulfill five obligations, including assessing the impact on shareholders, devising shareholder-protection measures, and communicating with shareholders. Earlier, Lee Chan-jin, Governor of the Financial Supervisory Service, had also said that Solidigm’s listing “could potentially constitute a dual listing.” 

[email protected] Kim Hak-jae, Lim Su-bin Reporter