SK Hynix shares dropped as much as 5.1% during Monday's trading session, weighed down by reports that its subsidiary Solidigm could pursue an initial public offering as early as next year. The company's largest shareholder, SK Square, fell as much as 7.1%, while SK Inc., which holds the largest stake in SK Square, declined as much as 5.4%. Weekend reports suggest Solidigm, the US-based semiconductor company acquired by SK Hynix, could seek a US listing that may value the business at as much as $100 billion. Such a listing could potentially unlock value from Solidigm, but investors are also assessing how it could affect the broader ownership and corporate structure of the SK group.
According to Reuters and IJR News, Solidigm, the US-based NAND flash memory and solid-state drive subsidiary of South Korea's SK Hynix Inc, is exploring an initial public offering potentially worth $150 billion. The company has started talks with potential advisers as SK Hynix considers listing the business separately, with the IPO potentially launching as soon as 2027. The company could raise $15 billion in the IPO, with plans remaining at an early stage and subject to change based on market conditions. However, SK Hynix had said in August that no decision had been taken on a Solidigm listing, following a local media report about the possibility. The Korea Corporate Governance Forum, representing investment professionals, had urged SK Hynix to abandon any such plans, arguing that a listing could make the group's ownership structure more complicated.
As reported by Reuters, the IPO would seek to tap strong investor demand for companies tied to artificial intelligence infrastructure, which has fuelled gains in semiconductor and hardware stocks. Solidigm, based in San Jose, California, supplies enterprise SSDs used in servers, cloud infrastructure and data centers, with the company differentiating itself through high-capacity storage products designed for AI applications. The company's enterprise solid-state drives can hold as much as 122 terabytes in a device roughly the size of a pack of cards. Solidigm has started signing deals that tie its growth more directly to the AI infrastructure buildout, including a multi-year agreement with AI cloud company CoreWeave in August that gives CoreWeave priority access to enterprise SSD capacity. The company works with major customers such as Dell Technologies and data platform company Vast Data.
According to Reuters, Solidigm is considering building a NAND flash memory chip factory in the US, with upstate New York emerging as a leading candidate, as part of efforts to expand manufacturing capacity. This expansion aligns with SK Hynix's broader strategy to boost Solidigm's competitiveness after media reports that the unit was exploring a pre-IPO fundraising round of about 5 trillion won ($3.6 billion). The manufacturing expansion would strengthen Solidigm's position in the global memory market and expand its capacity to meet growing demand for AI-focused storage solutions.
As reported by Reuters, SK Hynix acquired Intel Corp's NAND memory and SSD business for about $9 billion in a deal announced in 2020, combining those operations with Solidigm, which was launched as a standalone subsidiary in 2021. At the time, the company said the acquisition would strengthen its NAND flash and enterprise SSD businesses and expand its position in the global memory market. A valuation of up to $100 billion would far exceed recent semiconductor IPOs, including Arm Holdings' roughly $54 billion valuation at its 2023 debut and Cerebras Systems' approximately $56 billion fully diluted valuation in its 2026 IPO. The deal expanded SK Hynix's presence in the global memory-chip market.
According to market data, analysts maintain a Strong Buy consensus rating on SK Hynix stock based on 11 Buys assigned in the past three months, as indicated by recent market analysis. The average SKHY price target of $254.70 per share implies 33.2% upside potential for investors. An IPO would give investors a separate way to invest in part of SK Hynix's NAND storage business if they choose to specifically target that part of its operations. The company is based in Rancho Cordova, California, and has more than 2,000 employees operating from 13 locations globally.
