SK hynix (000660.KS) said on the 23rd that it had halted its review of an initial public offering for Solidigm, its U.S. NAND flash affiliate, while pledging to keep weighing funding options including direct investment to expand the business through a new chip fabrication plant in the United States.
The company disclosed in a regulatory filing that it had "decided to halt its review of Solidigm's IPO," then elaborated on its position through its newsroom. "Solidigm, which is based in the United States, needs to secure new production facilities locally," SK hynix said. "We have been comparing and reviewing various options, including direct investment and an IPO, to secure investment resources for growth."
Attracting outside capital through an IPO would have increased SK hynix's consolidated cash flow, allowing it to secure capacity for facility investment and shareholder returns such as dividends and share buybacks and cancellations at the same time, the company said. "Recent changes in financial market conditions mean we are halting the IPO, but we will continue to seek options for growth," it added.
Solidigm is headquartered in the United States but operates production facilities only in Dalian, China. The company is pushing to build its first plant on the U.S. East Coast to strengthen cooperation with American big tech firms and expand its memory supply chain.
Building a single fab currently requires tens of trillions of won. Constructing a cluster of multiple fabs would push the required funding to hundreds of trillions of won. With SK hynix having ruled out raising money through an IPO, the company must now focus on a range of other funding options, including direct investment.