Biggest Chip IPO Scrapped

01 Once an Albatross, Now Valued at $100 Billion

The story begins with Intel.

In 2020, SK Hynix announced the acquisition of Intel’s NAND flash and solid-state drive (SSD) business for roughly 10 trillion won. The following year, Solidigm was established in California to take over these assets.

The payment was split into two tranches: approximately $7 billion for the first installment and $2 billion for the second, with full settlement completed by the end of March 2025. The strategic logic was clear at the time. SK Hynix boasted strength in NAND for mobile handsets, while Intel had a solid foothold in enterprise-grade SSDs. The combination was meant to shore up Hynix’s NAND portfolio, which had lagged behind its DRAM business.

Reality soon dealt a heavy blow. After the deal closed, the memory sector slid into a downturn. Solidigm posted losses for several consecutive years, with cumulative losses exceeding 7 trillion won. Within South Korea’s securities circle, it was long regarded as SK Hynix’s white elephant — something not worth keeping yet too costly to discard. In September 2024, Chey Tae-won, Chairman of SK Group, joined Solidigm’s board of directors in person.

The turning point came with AI.

In Q2 2024, Solidigm turned profitable for the first time in 12 quarters. AI data centers need to store massive volumes of training and inference data, and high-capacity QLC enterprise SSDs are widely seen as the best replacement for hard disk drives. Solidigm happened to hold exactly this strength. Since then, enterprise SSDs, alongside HBM, have become the twin pillars driving SK Hynix’s AI memory revenue. In September this year, South Korea’s SSD exports surged 532% year-on-year. What was once an albatross had turned into a highly sought-after asset.

Earlier this year, SK Hynix carried out a restructuring of Solidigm. The original Solidigm legal entity was renamed AI Company, while the enterprise SSD business was transferred into a newly established Solidigm. On January 28, SK Hynix pledged up to $10 billion in funding for the structure, with SK Inc., SK Innovation and SK Telecom contributing an additional $1.1 billion. After this reshuffle, Solidigm went from being a direct subsidiary to a second-tier subsidiary. Few paid much attention to this detail at the time.

Valuation rose accordingly. In late September, Reuters reported that Solidigm had held meetings with investment banks vying for underwriting roles, targeting a valuation as high as $150 billion and proceeds of roughly $15 billion. The offering was poised to rank among the largest semiconductor IPOs ever in the United States.

In early October, Bloomberg followed up, reporting that Goldman Sachs and Morgan Stanley had been selected as lead underwriters. The IPO was targeting proceeds of around $10 billion, with an earliest listing timeline in 2027. According to estimates by Korean media, Solidigm accounted for roughly 13% of SK Hynix’s market value.

SK Hynix later explained its rationale for the listing. Existing capacity could not keep pace with AI-fueled demand, and Solidigm needed to build a new fab in the United States. Bringing in outside capital would boost consolidated cash flow; the funds could be deployed for capital expenditure, dividends and share buybacks and cancellations. A standalone listing would also let the market assign an independent valuation to Solidigm.

On paper, it sounded like a win‑win proposition.

02

79 Days: The Trouble With an Equity Chart

The trouble lay in that equity structure.

On August 5, Korea Economic Daily reported that Solidigm was advancing a pre‑IPO fundraising of 5 trillion to 10 trillion won, with the ultimate goal of a Nasdaq listing. SK Hynix issued a clarification statement the same day, saying it was reviewing multiple options and nothing had been finalized. Shareholders were far from reassured, and the stock fell roughly 10% the next trading day.

The fierce backlash from retail investors stemmed from Solidigm’s position within the group. The ownership chain for SK Group’s semiconductor business ran SK Inc. → SK Square → SK Hynix → AI Company → Solidigm. The first three entities are already listed in South Korea, and SK Hynix had issued ADRs in New York that July in the largest offering ever by a non‑U.S. firm. Adding a Nasdaq listing for Solidigm led Korean media to dub it a **quadruple listing**. The logic was straightforward: Solidigm is wholly owned by AI Company, and its profits are largely consolidated into SK Hynix’s financial statements. If outside investors were brought in, those earnings would have to be shared with new stakeholders.

A head of research at a securities firm put it more bluntly: capital shortage was never the driving reason for the listing. He traced the motive to the group’s governance structure. SK Hynix’s largest shareholder is SK Square, and only roughly 20% of the dividends distributed by Hynix flow to SK Square before trickling further up the chain to SK Inc.

Another detail made the situation even more delicate. According to Korean media, the lead for this pre‑IPO push was Noh Jong‑won, former President of SK Hynix. After leaving the company, he set up a private equity firm in the United States. Notably, he was the very architect behind the original acquisition of Intel’s NAND flash business.

Opposition kept mounting. In August, the Korea Corporate Governance Forum, which represents institutional investors, publicly advised SK Hynix to scrap the listing plan.

On September 21, minority shareholder platform ACT sent a letter to SK Hynix’s board of directors, demanding clarity on why external financing was necessary and what impacts alternative options such as internal funds and debt financing would have on shareholders respectively. On October 1, ACT issued another statement, arguing that a standalone Solidigm listing would siphon core growth value that rightfully belonged to existing shareholders toward outside investors and deepen the parent company’s valuation discount. It formally called on the board to revisit the plan.

What really complicated matters was a rule change. This year, South Korea’s financial authorities set the tone for dual listing in their capital market reform package: prohibited as a general rule, permitted only under exceptions. The detailed regulations were approved in late July and took effect on August 3.

If a listed company seeks to spin off and list a subsidiary under its effective control, the parent board must complete a full set of shareholder protection procedures. This requirement also applies to subsidiaries seeking overseas exchange listings. Failure to fulfill these obligations carries a maximum fine of 1 billion won and may trigger a one‑day trading halt. The revised Commercial Act, which entered into force in late July, further stipulates that directors owe a duty of loyalty to all shareholders.

Solidigm walked straight into this regulatory crossfire.

On October 19, the head of South Korea’s Financial Supervisory Service stated during a parliamentary audit that Solidigm’s proposed listing raised dual-listing concerns. Three days later, the Chairman of the Financial Commission also commented publicly, confirming that Solidigm’s planned U.S. listing fell within the scope of the dual-listing guidelines.

Share prices, too, cast their vote on behalf of shareholders. On August 6, SK Hynix tumbled more than 9% intraday. The selloff came amid a confluence of headwinds: weakness in U.S. chip stocks, the Solidigm listing rumours, and the long wait for a shareholder return plan. By October, its stock had fallen roughly 30% from late September levels.

Then came the announcement on October 23. SK Hynix made no mention of regulators in the filing. Its official line was that, in light of recent capital market conditions and share price performance, it needed to reassess whether the listing would be in the best interests of the company and its existing shareholders.

03

Whose Solidigm?

The news drew nearly unanimous praise from South Korean brokerages. Meritz Securities viewed the move as a signal that the company was prioritizing value for existing shareholders, with further shareholder return measures widely expected to follow.

Behind this applause lay years of pent‑up frustration among South Korean retail investors.

The “Korea discount” is a longstanding ailment of the country’s capital market, and dual listing is one of the most frequently cited culprits. In 2020, LG Chem carved out its battery business into LG Energy Solution, which went on to hold its standalone listing in early 2022.

Many retail investors had bought LG Chem shares specifically for its battery growth story, only to watch its most valuable asset be spun off and separately valued. That resentment lingers to this day. The new dual‑listing rules introduced this year were framed by Korean media as a safeguard against a repeat of the LG Energy Solution controversy.

No company had yet completed the full dual-listing process after the rules took effect. Solidigm became the first major conglomerate case to run into this framework, and by far the most significant one. Its outcome has, to some extent, drawn a line for future contenders. Some Korean media outlets have voiced concerns that this withdrawal could spill over into listing plans at other large groups, with subsidiaries in emerging sectors such as robotics now sitting on the sidelines.

Still, Solidigm’s challenges have not gone away.

SK Hynix stressed repeatedly in its filing that Solidigm’s growth potential and capital needs remain unchanged. Existing capacity cannot keep up with AI-driven demand, and the new U.S. fab will still be built. The timing, scale and funding structure of the investment will now be reassessed, with direct investment also on the table. In other words, after this long detour, SK Hynix may well end up footing the bill itself.

Time is not on its side. China’s Yangtze Memory Technologies (YMTC) is ramping up production and narrowing the gap with leading players. Enterprise SSDs are currently the most profitable segment within NAND. Whoever scales capacity first stands to grab a bigger slice of the pie.