[Key summary]
① Solidigm, SK hynix's NAND subsidiary, posted sales of 12.25 trillion won and net profit of 5.84 trillion won in the first half of this year, a 44-fold jump from the same period last year. The company swung to a cumulative net profit and escaped full capital impairment.
② Driven by the sharp rise in net profit, Solidigm's pre-IPO valuation — as it pursues a NASDAQ listing — could exceed the market's expected 50 trillion won.
③ SK Group and SK Innovation secured stakes in the parent company (NPS) at relatively low prices and stand to benefit, while SK Telecom paid four times as much per share, a move expected to draw scrutiny.
Solidigm, the SK Group affiliate pursuing a stock market listing, posted blockbuster earnings in the first half of this year, raising the prospect that SK Group will collect more cash than expected from a pre-IPO share sale. SK Group and SK Innovation, which recently invested in Solidigm's parent company, are also set to reap substantial gains — though SK Telecom, unlike its affiliates, paid a far higher price for its stake and is expected to face questions over the deal.
※ For background on SK Group's four-way listing strategy and the mysteries of its American ambitions, see "Hong Gil-yong's Hwasik Yeoljeon," episode 909.
An analysis of SK hynix's semiannual report shows that Solidigm — the NAND business unit of SK hynix NAND Product Solutions (NPS) — recorded sales of 12.25 trillion won ($8.66 billion) and net profit of 5.84 trillion won in the first half of this year. In the same period last year, sales stood at 3.36 trillion won and net profit at 132 billion won. In the second half of last year, sales reached 5.82 trillion won and net profit 1.26 trillion won. The net profit margin has climbed steeply — from 3.9 percent in the first half of last year, to 21.6 percent in the second half, to 47.7 percent in the first half of this year.
For the first time since SK hynix acquired Intel's NAND business in 2021, Solidigm has swung to a cumulative net profit. Its equity also expanded to 8.23 trillion won, allowing the company to fully escape capital impairment.
At the current pace, Solidigm's full-year net profit could exceed 12 trillion won and its equity surpass 14 trillion won. With SK hynix currently trading at a price-to-earnings ratio of four times, Solidigm appears well positioned to secure a pre-IPO valuation of around 50 trillion won, in line with market expectations.
However, given that Solidigm is targeting a NASDAQ listing and that enterprise SSD products rely on long-term customer relationships, the company could command a significantly higher valuation than SK hynix. Micron and SanDisk currently trade at around 22 times earnings.
Solidigm's dramatic turnaround owes much to SK hynix's sustained investment. After deciding to acquire Intel's NAND business in 2020, SK hynix paid $8.84 billion in acquisition costs between 2021 and 2025.
Even after the acquisition, Solidigm struggled with losses for some time. It posted net losses of 3.3 trillion won in 2022 and 4 trillion won in 2023, and by the end of 2023 its total equity had fallen to negative 765.5 billion won, leaving it in full capital impairment. The company returned to profit in 2024 and has been on a sharp upswing since last year.
Yet the affiliate poised to earn the highest return on investment is not SK hynix itself.
On May 18, SK Group acquired 1,295 shares of NPS, securing a 1.27 percent stake. The purchase price was 154.24 million won per share, for a total of 199.7 billion won. At the time, NPS had approximately 102,000 shares outstanding, implying a total enterprise value of about 15.71 trillion won. SK Innovation also acquired a 0.6 percent stake in NPS during the second quarter for 92.44 billion won, implying a valuation of roughly 17.4 trillion won.
SK Telecom, however, acquired 642 shares on July 31 for 397.1 billion won — about 618.58 million won per share, or roughly four times the price SK Group paid. The implied enterprise value SK Telecom assigned to NPS was 63.42 trillion won.
It is difficult to attribute the price difference to Solidigm's first-half results, since SK Telecom's board approved the NPS investment on June 29 — before the first-half books were closed.
SK Innovation also made an additional capital contribution of $143.4 million through a US subsidiary on July 23, though the price and terms were not disclosed.
The prices at which SK Group affiliates acquired their NPS stakes could serve as an important benchmark when Solidigm solicits pre-IPO investors.
Meanwhile, Solidigm's surprise earnings could intensify the debate over its planned listing. Critics could argue that a company generating ample cash from operations has little need to raise outside capital — and that if its financial position continues to improve, it could simply borrow instead.
SK hynix is expected to make a related disclosure as early as Sept. 4 or 5. The justification SK Group is most likely to put forward to quiet the controversy is recouping its investment through secondary share sales — the argument being that the proceeds would be channeled through NPS to find new investment opportunities within the AI ecosystem. Under that logic, the capital contributions made by SK Group, SK Innovation and SK Telecom to NPS could also be framed as receiving an opportunity in exchange for sharing the risk.
kyhong@heraldcorp.com
