[Exclusive] SK Hynix Scraps Solidigm Nasdaq IPO, Accepting Shareholder Views

Public sentiment sours over dual-listing controversy

Capital-market conditions and weak domestic stock market also weighed

SK Hynix has decided to withdraw the planned Nasdaq initial public offering of its sub-subsidiary Solidigm after weighing intensifying shareholder opposition, capital-market conditions and the company’s share-price performance following news of the listing plan.

According to industry sources on October 22, SK Hynix has concluded it will scrap Solidigm’s U.S. listing and plans to announce the decision soon. A pre-IPO share investment process that had been pursued alongside the listing has also been halted.

Analysts say strong shareholder backlash and a decline in SK Hynix shares had a decisive impact on the decision. Shareholders had worried that a Solidigm listing would trigger a dual-listing discount and undermine SK Hynix’s corporate value. Opposition also grew over concerns that any new share issuance in the listing process would dilute existing shareholders’ stakes, while Solidigm’s net profit and future earnings, which had previously accrued to SK Hynix shareholders, would be distributed to new investors.

Solidigm carries substantial weight within the group. It accounts for 12.9% of SK Hynix’s overall corporate value. Its parent, AI Company, posted first-half net profit of 5.84 trillion won ($4.2 billion) this year, equivalent to 4.3% of SK Hynix’s total, while its share of revenue was 9.3%, close to 10%.

Solidigm was established after SK Hynix acquired Intel’s NAND flash business in 2021. AI Company, a U.S. intermediate holding company, owns 100% of the company. Earlier this year, SK Hynix set up AI Company in January, placed a new Solidigm entity beneath it as part of a governance restructuring, and committed up to $10 billion in capital.

SK Hynix’s decision to formally withdraw the Solidigm listing plan after accepting shareholder opinion is expected to settle, for now, the market debate over equity-value dilution and damage to shareholder value.

Kim Chae-yeon, Hankyung.com reporter why29@hankyung.com

Roh Yu-jeong, Hankyung.com reporter yjroh@hankyung.com