SK Hynix scraps Solidigm U.S. IPO plan; Seoul shares close up 4.4% after early losses

SK hynix (SKHY) has ended its review of a U.S. initial public offering for Solidigm, its NAND and enterprise-SSD subsidiary. In a regulatory filing made before the Seoul market opened on Oct. 23, the company said it reached the decision after considering capital market conditions, and in a separate statement said financial market volatility had increased and contributed to a broader correction in semiconductor stocks. It added that Solidigm's growth outlook and investment needs are unchanged. The listing had been expected to raise $10 billion to $15 billion and value the unit at up to $150 billion, according to Korean press reports.

Outside pressure was the backdrop. Korea's financial regulators had told lawmakers that a separate U.S. listing of Solidigm would run afoul of the country's dual-listing rules, and SK hynix shareholders argued it would create a valuation discount for the parent and dilute their indirect stake. Bloomberg's report framed the decision around those shareholder concerns, while the company's own wording cited only market conditions.

The share reaction needs reading carefully, because two sessions and two listings are involved. The U.S. ADR fell 8.1% in Thursday's regular session, to $131.69 from a $143.25 prior close, as part of a chip-wide selloff in which the Philadelphia Semiconductor Index dropped 6.72%; that move came before the announcement. After the news, the Seoul-listed shares reversed early losses on Friday to close up 4.4%, and the ADR traded about 5% higher before the U.S. open at around $138.4, a partial retrace rather than a full recovery. Even with the bounce, the shares were down more than 30% since late September, per Reuters. The open question is how SK hynix now funds Solidigm's capacity expansion without the IPO proceeds, and whether it signals any change to buybacks or dividends.