SK hynix Drops Solidigm Listing to Fund U.S. SSD Plant

SK hynix, one of the world's largest memory chip makers, has halted plans to take Solidigm public, a decision announced early on Friday, October 23.

The company said unfavorable stock market conditions and recent movement in semiconductor share prices made a listing unattractive. It has ended its review of both a pre-IPO financing round and a full listing of Solidigm, though it continues to examine other ways to fund the project. SK hynix said current market conditions would prevent Solidigm from receiving a valuation reflecting its growth outlook.

Alongside the announcement, SK hynix confirmed plans to build a new Solidigm fabrication plant in the United States to address demand for enterprise SSDs. The company has not disclosed the facility's size, cost, or construction timeline. Solidigm produces high-capacity data center SSDs using floating gate 3D QLC NAND memory, and SK hynix said its current manufacturing capacity barely covers projected requirements as AI infrastructure buildouts expand.

SK hynix evaluated several funding routes for the expansion, including direct investment, a funding round before an offering, and a full listing. An offering could have brought in outside capital without adding debt. It could also have valued the subsidiary in a way SK hynix believes its own market capitalization does not reflect. Proceeds might have gone toward dividends, share buybacks, or share cancellations.

Questions remain about how the project will be financed. Enterprise SSD demand is at a record and is expected to rise over the next two years, while a modern 3D NAND plant can cost tens of billions of dollars. Outside funding could have reduced the load on SK hynix's balance sheet and preserved capital for other projects.

One factor may be Solidigm's profitability. Micron's enterprise storage division recently reported a 90% non-GAAP gross margin, and Solidigm, which holds 21.1% of the enterprise SSD market together with its parent, may earn more by selling exclusive products. Sustained margins could generate cash for future investment, and SK hynix could fund the U.S. expansion through internal cash and debt while retaining full ownership of the subsidiary.