SK hynix vows to find new funding path for Solidigm after scrapping NASDAQ IPO

SK hynix's abrupt withdrawal of its US subsidiary Solidigm's planned NASDAQ listing has eased shareholder concerns over equity dilution from a dual listing, but the move has narrowed the company's options for raising external capital — putting the spotlight on how it will fund future investment.

In a statement posted to its newsroom Friday, SK hynix said the IPO had been "one of the options considered to secure new growth capital for Solidigm and enhance shareholder value," offering its first public explanation for why it had pursued a US listing.

The company said it had believed that a successful IPO, if Solidigm received a fair market valuation, would allow the market to properly recognize the subsidiary's growth potential.

SK hynix had also expected that attracting external capital through the IPO would boost its consolidated cash flow, giving it more room to fund facility investment while simultaneously strengthening shareholder returns through dividends and share buyback and cancellation.

With the listing now scrapped, however, the door to external financing through an IPO has closed, leaving the search for alternative funding sources as the company's next challenge.

Solidigm is a US entity SK hynix established in 2021 after acquiring Intel's NAND flash memory business for 10 trillion won ($7.54 billion). The company posted losses running into the trillions of won through 2023 but has been profitable since 2024.

Solidigm has since established itself as a key NAND player in the US market, driven by high-capacity enterprise solid-state drives — a product in strong demand across AI data center deployments.

As storage demand from AI data centers surged and existing production facilities began hitting their limits, the need for capacity expansion came to the fore. Reports emerged last month that SK hynix was exploring plans to build a new NAND factory in New York state.

Against that backdrop, both internal funding and external capital-raising emerged as options for financing Solidigm's facility investment. The appointment of Goldman Sachs and Morgan Stanley as lead underwriters had signaled a tilt toward the external route.

But the IPO ran into shareholder resistance. Issuing new shares in the listing process would have diluted existing shareholders' stakes and redirected a portion of Solidigm's net profit — previously flowing to SK hynix shareholders — to new investors.

Some argued that SK hynix's strong earnings in recent years meant it already had sufficient cash on hand to fund the expansion without tapping external markets.

Lee Nam-woo, chairman of the Korea Corporate Governance Forum, said SK hynix's cash holdings would reach 132 trillion won by year-end. "If tens of trillions of won are needed for Solidigm's capital expenditure, SK hynix — which is flush with cash — could simply inject funds into Solidigm through its AI company," he said.

With cash reserves expected to exceed 130 trillion won, critics questioned why the company would pursue an IPO to raise just $10 billion in external financing.

SK hynix said it would halt the listing process for Solidigm but continue exploring ways to secure investment capital for its growth.

"Expanding Solidigm's production capacity and strengthening its competitiveness remain important priorities," the company said. "SK hynix will continue to review the timing, scale and method of investment financing, and will persistently explore a range of options that can simultaneously advance Solidigm's growth and enhance returns for existing shareholders."