SK hynix (000660.KS) reversed early losses to trade more than 2% higher after the chipmaker said it had suspended its review of a U.S. initial public offering for Solidigm. Investor sentiment, battered by an overnight selloff in U.S. technology stocks, partially recovered as worries about a dual listing eased and traders viewed the decline as excessive.
SK hynix was trading at 1.255 million won as of 1:38 p.m. on the 23rd, up 2.62% from the previous session, according to the Korea Exchange. The stock had slipped below 1.2 million won early in the session before buying interest pushed it into positive territory. Samsung Electronics (005930.KS) was down 0.70% at 213,000 won, recovering the 210,000-won level it had given up earlier in the day.
In a regulatory filing before the market opened, SK hynix said it was halting its review of a pre-IPO funding round and an initial public offering for Solidigm, its overseas subsidiary. The company said it had examined various financing options to expand production capacity and strengthen competitiveness, but reached the decision after weighing capital market conditions and other factors.
In a separate statement, the company stressed that neither Solidigm's growth potential nor the need for investment had changed. Given recent capital market conditions and the share price trend, it concluded that it needed to reassess whether an IPO at this point was the most advantageous option for SK hynix and its existing shareholders.
Market participants said the decision could ease concerns about a valuation discount from a dual listing and the dilution of existing shareholder value. Yang Hyun-kyung, an analyst at iM Securities, said the move reflected acceptance of concerns over damage to shareholder value, which could reduce wariness about a dual-listing discount and equity dilution. Yang also noted that reduced access to outside capital could increase the burden of funding future investments.
Analysts also pointed to the possibility of improved supply and demand through an expansion of American depositary receipts in circulation. Goldman Sachs said that if SK hynix raised the share of its stock circulating as ADRs to 5% to 10% from about 2.5%, it could improve the chances of inclusion in the Nasdaq 100 and attract long-term passive fund inflows, according to Investing.com on the 22nd. The forecast assumes an increase in ADR volume.
Korean semiconductor shares fell together immediately after the open on the bad news from the United States. In overnight trading in New York, Nvidia and Micron dropped 4.4% and 6.3%, respectively, as deteriorating cash flow at Meta and the burden of AI investment costs drew attention. The Philadelphia Semiconductor Index plunged 6.72%. Rising international oil prices on heightened tensions in the Middle East also weighed on sentiment.
In the afternoon, however, the KOSPI pared its losses as investors judged the market oversold and institutional buying came in. At the same time, the benchmark index stood at 5,491.90, down 41.87 points, or 0.76%, from the previous session. It opened 2.36% lower at 5,403.17 and slid as far as 5,305.98 early in the session before rebounding to as high as 5,502.20 intraday.
On the main board, foreign investors were net sellers of 942.5 billion won, while institutions and individuals were net buyers of 688.3 billion won and 213.2 billion won, respectively. Samsung Biologics (207940.KS) rose 7.79%, while LG Energy Solution (373220.KS) fell 2.05%, Samsung Electro-Mechanics (009150.KS) dropped 3.84%, Hyundai Motor (005380.KS) lost 3.15% and KB Financial Group (105560.KS) declined 4.17%.
Earlier, before the open, Han Ji-young, an analyst at Kiwoom Securities, said the market could recoup its losses after absorbing panic selling early in the session, given that the Meta-driven bad news had partly been priced in the previous day and that the market was seen as oversold. Han also said the filing on the suspension of the Solidigm IPO review would help improve sentiment toward semiconductor stocks.
The KOSDAQ, by contrast, lagged. At the same time, the index was trading at 746.09, down 18.01 points, or 2.36%, from the previous session. Individuals were net buyers of 102.6 billion won, while foreign investors and institutions were net sellers of 43.5 billion won and 60.5 billion won, respectively.
