SK Hynix suspends Solidigm US IPO review, cites market volatility
SK Hynix said on 23 October it suspended a review of a US IPO for its Solidigm subsidiary, citing market volatility and share price trends. The decision follows South Korean regulatory scrutiny over dual-listing restrictions. Shares in SK Hynix have fallen over 30 per cent since the IPO was reported
South Korean chipmaker SK Hynix said on Friday that it had suspended its review of a US initial public offering for its Solidigm subsidiary, citing financial market volatility and share price trends.
South Korea's financial regulator said earlier this week that the listing could run afoul of the country's dual-listing restrictions, which were tightened in July to strengthen shareholder protection.
SK Hynix said in a statement it would continue to explore ways to fund Solidigm's expansion and enhance shareholder value, including reviewing the timing, scale and financing of future investments.
"This decision does not reflect any change in Solidigm's growth prospects or investment needs," the company said.
The move brings an end, at least for now, to a potential fundraising option that Reuters reported could raise as much as US$15 billion (HK$117 billion), highlighting the challenge of balancing investment needs driven by booming AI-related memory demand with growing concerns in South Korea over the impact of subsidiary listings on existing shareholders.
Despite strong business performance at both SK Hynix and Solidigm, the company said increased market volatility and a broader correction in semiconductor stocks had prompted it to reconsider the listing. Shares in SK Hynix have fallen more than 30 per cent since the potential Solidigm IPO was reported in late September, compared with a 20 per cent decline in South Korea's benchmark KOSPI index over the same period.
The announcement could, however, help improve investor sentiment towards semiconductor stocks, said Han Ji-young, an analyst at Kiwoom Securities. Concerns over Meta's creditworthiness, a selloff in US AI stocks and pressure from oil prices had repeatedly weighed on markets, eroding investor confidence, he added. The decision also follows heightened regulatory scrutiny of the proposed listing. Financial Supervisory Service Governor Lee Chan-jin told a parliamentary hearing earlier this week that regulators were examining whether Solidigm's potential US initial public offering would require a review under domestic rules.