SK hynix says internal funding and external capital options will be weighed against their impact on existing shareholders
SK hynix said on Oct. 1 that no decision has been made regarding a potential U.S. initial public offering of Solidigm, its NAND flash and enterprise solid-state drive subsidiary, reiterating that it is reviewing various options to strengthen the company’s competitiveness.
The statement comes amid growing market attention over reports that Solidigm could seek outside capital or pursue a separate listing in the United States as demand for high-capacity enterprise SSDs (eSSDs) rises alongside investment in artificial intelligence data centers.
“We are reviewing various options to strengthen Solidigm’s competitiveness, but our position that nothing has been finalized remains unchanged,” SK hynix said.
The company added that any funding decision would take into account market conditions, investment timing, its financial position and the potential economic impact on existing SK hynix shareholders.
Reports Point to Possible U.S. IPO
Reuters reported on Sept. 25, citing people familiar with the matter, that Solidigm was considering a U.S. IPO as early as 2027 and had held discussions with investment banks over potential underwriting roles.
The report cited a possible valuation of up to $150 billion and potential proceeds of around $15 billion. The size and timing of any transaction remain at an early stage and could change depending on market conditions.
Separate reports have also raised the possibility that Solidigm could seek around 5 trillion won in pre-IPO investment.
SK hynix previously responded that it was considering multiple options to enhance Solidigm’s competitiveness but that no specific plan had been decided. The company has maintained the same position in disclosures filed with the U.S. Securities and Exchange Commission.
The reports have also raised concerns in South Korea over a potential separate listing of Solidigm and its implications for SK hynix shareholders.
AI Data Centers Drive Demand for High-Capacity eSSDs
Solidigm was established following SK hynix’s acquisition of Intel’s NAND and SSD business. SK hynix agreed in 2020 to acquire the business for approximately $9 billion and subsequently carried out the transaction in stages.
The U.S.-based subsidiary focuses primarily on enterprise SSDs and has expanded its presence in high-capacity storage products for data centers.
Demand for enterprise storage has increased as global technology companies expand AI infrastructure. The rapid growth of data generated and processed by AI workloads is driving demand for high-capacity storage alongside high-performance computing and memory products.
Solidigm has been expanding its portfolio of high-capacity eSSDs based on quad-level cell, or QLC, NAND technology for AI and data center applications.
For SK hynix, the business complements its growing portfolio of AI-related products, which includes high-bandwidth memory, server DRAM and enterprise storage.
The expansion of Solidigm’s business, however, also requires continued investment in production capacity, product development and technology.
SK hynix Weighs Internal Funding and External Capital
SK hynix said it has the financial capacity to fund Solidigm internally but does not regard the use of its own capital as the only option.
The company is simultaneously investing across several businesses, including HBM, server DRAM, NAND flash and enterprise SSDs, making capital allocation an important consideration in determining how additional Solidigm investment would be funded.
Potential options could include internal funding or the use of external capital. However, SK hynix stressed that no particular financing method has been finalized.
The company said the choice of funding source would be considered in light of market conditions, the timing of investment, its financial position and its broader capital expenditure plans.
SK hynix also said that if external capital is considered, it would compare the option with the use of internal funds and assess the economic impact on existing shareholders.
Shareholder Protection to Be Reviewed if Plans Advance
Market concerns have focused on whether a separate Solidigm listing could dilute the economic interests of existing SK hynix shareholders.
SK hynix said that if plans for a separate listing or external investment move to a more concrete stage, its board would review the financial and business implications as well as measures to protect existing shareholders.
The company emphasized that long-term corporate value and shareholder value would remain central to any decision.
“If we move forward with reviewing a specific plan, we will also examine its impact on existing shareholders and any necessary shareholder protection measures, and provide sufficient explanation,” the company said.
For now, SK hynix maintains that no Solidigm IPO or external fundraising plan has been finalized. The company continues to review funding options as it expands its AI memory and enterprise storage businesses.
