SK hynix said Thursday that it has not decided how to fund Solidigm, its U.S.-based enterprise SSD subsidiary, as it tried to calm investors alarmed by reports of a possible American stock listing for the unit, The Korea Herald reported. The South Korean memory maker said it is weighing both internal funds and outside capital, and that long-term value for existing shareholders will be the deciding test.

What Happened

In a statement posted to its newsroom, SK hynix said no matters had been determined regarding measures to make Solidigm more competitive. Aju Press reported that the company described Solidigm as needing investment in capacity expansion and technology.

SK hynix said its finances are strong enough to fund Solidigm internally, but argued that this does not make internal funding the best option by default. Memory chipmaking requires heavy spending, and the company said it must weigh market conditions, investment timing and its own financial position while balancing capital across high-bandwidth memory, server DRAM and enterprise SSDs. Any outside capital, it said, should be judged by its full economic effect on current shareholders, not just its structure.

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The company said its board will review the financial and business impact of any concrete plan, that it will follow regulatory procedures and consider measures to protect shareholders, and that it will explain the details once a plan exists. It gave no timeline.

Why It Matters

The statement responds to a Reuters report on Sept. 26 that Solidigm had held pitch meetings with investment banks about a U.S. initial public offering as early as 2027. Reuters said the listing could value the unit at up to $150 billion and raise about $15 billion, which would make it the largest U.S. semiconductor IPO, far above Arm's valuation of roughly $54 billion at its 2023 debut. SK hynix has not confirmed those figures.

Investors reacted quickly. SK hynix shares fell about 5% Monday, Sept. 28, the first trading day after the report, according to BigGo, and SK Square and SK Inc., the holding companies above SK hynix, also dropped. The Korea Corporate Governance Forum urged the company to halt the talks, warning that a Solidigm listing would create a five-tier chain of separately listed companies running from SK Inc. through SK Square and SK hynix to a U.S. entity.

Context

Separate listings of subsidiaries are a sensitive issue in South Korea, where shareholders of a parent company often see value shift to new investors when a fast-growing unit is listed on its own. That concern is sharper here because Solidigm's value has risen with demand from AI data centers for high-capacity enterprise SSDs.

Solidigm was formed from Intel's NAND flash and SSD business, which SK hynix agreed to buy for about $9 billion in 2020. SK hynix has also disclosed plans for Solidigm to build a NAND factory in the United States, with upstate New York a leading candidate, according to The Korea Times.

What to Watch

The main questions are whether Solidigm's funding comes through an IPO, private outside investors or SK hynix itself, and what protections the board offers existing shareholders if outside money is involved. Investor groups opposed to a listing have asked the board to reconsider, and any concrete plan will require a board review and public disclosure before it proceeds.