SK hynix (000660) has withdrawn plans to list Solidigm, its U.S. NAND flash sub-subsidiary, on the Nasdaq. The company cited capital market conditions and the share price performance of semiconductor companies. But shareholder opposition and warnings from financial regulators over duplicate listings appear to have weighed on the decision. Financial Supervisory Service Governor Lee Chan-jin and Financial Services Commission Chairman Lee Eok-won each voiced concerns, and lawmakers from both the governing and opposition parties raised the issue during the parliamentary audit of government agencies, invoking shareholder protection. Since the withdrawal, calls for tighter rules on duplicate listings have grown louder.
Safeguards are needed to protect minority shareholders from indiscriminate duplicate listings. Still, the question of whether the Solidigm listing would erode shareholder value or raise corporate value through expanded investment deserves scrutiny. Solidigm was created when SK hynix acquired Intel's NAND business. With demand for solid-state drives (SSDs) used in artificial intelligence data centers surging, expanding production capacity has become urgent. The market had initially expected the listing to raise as much as $15 billion, but the withdrawal leaves the company searching for alternatives. SK hynix must already pour vast sums into its high-bandwidth memory (HBM) and DRAM plants in Yongin and the Honam region. If it also shoulders the cost of expanding Solidigm, its financial burden will grow and its capacity for shareholder returns may shrink. There is merit in the argument that existing shareholders, who absorbed losses after the acquisition, should reap the rewards. But long-term shareholder value must be judged by weighing the dilution that comes with outside capital against the gains from expanded investment.
In the race for AI chips, the timing of investment decides who wins. Narrowing the paths to financing in the name of shareholder protection must not come at the cost of missing growth opportunities. Companies should explain transparently how funds will be used, what returns they expect and how existing shareholders will be affected, and should offer protections that actually work. Financial regulators, for their part, should clarify the scope and standards of rules governing overseas affiliate listings to make corporate investment more predictable. Slamming on the brakes simply because a deal involves a duplicate listing, without examining the listing terms or the shareholder protections attached, is excessive. Blocking financing does not raise shareholder value. If missing the right moment to invest dulls competitiveness, that loss will ultimately fall on the very domestic shareholders the measures were meant to protect.