Solidigm U.S. IPO Raises Fears Over SK hynix’s Value
Reports that Solidigm, SK hynix’s U.S.-based NAND flash subsidiary, is pursuing a listing on American stock markets have prompted growing concerns among shareholders over potential damage to the parent company’s corporate value. Some analysts argue that a separate listing of the enterprise solid-sta
Solidigm, SK hynix’s U.S. NAND flash subsidiary, is reportedly planning to list on American stock markets, sparking fears among shareholders that the move could harm the parent company’s value. Analysts warn that a separate listing of the enterprise solid-state drive (SSD) business could siphon investment demand and dilute SK hynix’s control over a crucial asset.
SK hynix shares dropped 5.05% on Sept. 28 on the domestic market, while Solidigm’s ADRs on the New York Stock Exchange fell 5.03% on the same day. The decline followed reports suggesting Solidigm aims for an IPO in the U.S. next year with a valuation target of up to $150 billion. The primary concern is the potential multiple-listing discount arising from an already complicated ownership structure, with SK Group’s semiconductor governance chain spanning five layers of ownership.
Critics argue that this could allow SK hynix to expand its governance pyramid while evading domestic regulations. The proposed listing could divert capital toward Solidigm, intensifying downward pressure on SK hynix’s share price if foreign investors shift their focus. While the company and some experts argue that the IPO could raise up to $15 billion for expanding SSD production and R&D, reducing the direct investment burden on SK hynix, ordinary shareholders fear the dilution of ownership and potential value stripping.
SK hynix maintains it is reviewing options to boost competitiveness without finalizing a plan. Despite a preliminary disclosure, the market views the move as a signal of weighing the timing of a listing rather than ruling it out. Analysts suggest the listing could weigh on the share price in the short term, but acknowledge medium- to long-term benefits.
However, transparent disclosure of new share issuances, intended use of proceeds, and a shareholder return policy will be crucial to mitigate investor backlash.
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