SK Hynix stops considering Solidigm IPO in the US — CNBC

South Korean chipmaker SK Hynix has stopped considering pre-IPO financing options and an initial public offering for its US subsidiary Solidigm. Following the announcement, SK Hynix shares in Seoul were down by as much as 3% on the morning of October 23, CNBC reports.

Reasons for reviewing the plans

The company said that Solidigm is halting its consideration of pre-IPO and IPO opportunities after assessing capital market conditions and share price dynamics. At the same time, SK Hynix is exploring various options to finance a new semiconductor plant in the United States amid growing demand for memory for artificial intelligence systems.

SK Hynix noted that a public offering could have financed Solidigm’s expansion and provided greater financial flexibility for payments to shareholders, including dividends, share buybacks and share cancellations. However, increased volatility in financial markets and the broader correction in the semiconductor sector prompted the company to reconsider whether an IPO would serve the interests of existing shareholders.

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Regulator’s review

The decision was also made amid attention from South Korea’s financial regulator. According to Reuters, the regulator said that a potential US listing of Solidigm could conflict with the country’s rules on dual listings. Financial Supervisory Service Governor Lee Chan-jin said the agency is checking whether the IPO would require a review under rules aimed at protecting minority shareholders.

SK Hynix stressed that Solidigm’s investment needs have not changed. Solidigm’s existing production capacity is limited and cannot fully meet growing AI-related demand for memory, so SK Hynix will continue seeking alternative sources of financing for the subsidiary’s development.