The memory maker cited market conditions and share-price trends for halting its review of a listing for the storage unit. Its U.S.-listed shares rose 4% while storage peers fell, ahead of quarterly results on Oct. 28.
SK Hynix has decided not to sell part of its storage business to public investors for now. It has not decided how to pay for what that money was supposed to build.
"Solidigm will halt its review of potential pre-IPO and IPO options," the company said in a statement dated Oct. 23 in Seoul. It cited "recent capital market conditions and share price trends," saying financial market volatility had increased, "contributing to a broader correction in semiconductor stocks."
The company said the original purpose of the review was to fund a new U.S. factory to meet demand for AI memory, because existing facilities have "limited capacity." It added: "This decision does not reflect any change in Solidigm's growth prospects or investment needs." SK Hynix will "continue to assess investment timing, scale, and financing methods."
Two explanations
The company's statement frames the decision as a matter of timing and valuation. Bloomberg News reported opposition from regulators and shareholders, amid scrutiny of listings in which a subsidiary goes public separately from its listed parent. The company's statement did not mention either. Both explanations can be true at once.
The reaction
In Seoul, SK Hynix shares fell as much as 3% early on Friday, then reversed to close 4.4% higher at 1,277,000 won, and SK Square, its parent, rose 3.2% to 775,000 won. The Kospi closed slightly higher.
In New York, SK Hynix's U.S.-listed shares rose 4.1% to $137.02. That stood out against the rest of memory and storage. Micron rose 2.5%, but Western Digital fell 3.0%, Seagate 1.8% and SanDisk 1.8%. The VanEck Semiconductor ETF gained 0.7%. SK Hynix's U.S. shares remain about 31% below their 52-week high of $199.87.
Overhang removed, or a funding gap
The positive reading is that dropping the listing removes a concern for SK Hynix shareholders, who would have seen part of a valuable unit trade separately. The company already committed in August to a 40 trillion won share repurchase and cancellation program and to returning more than 50% of free cash flow to shareholders.
The cautious reading is that the factory still has to be paid for. The company has said its investment needs are unchanged. If it does not raise money from outside investors in Solidigm, it must fund the plant with debt, partners or its own cash, and the last of those competes directly with its shareholder-return pledge.
The broader signal
The decision is one of several this month in which AI-linked companies have found public markets less receptive. It came in a week of heavy selling in AI-related stocks and wider corporate bond spreads.
What to watch
SK Hynix's third-quarter results on Oct. 28, when investors will look for detail on capital allocation and how the company plans to finance Solidigm's U.S. expansion. Samsung Electronics reports the following day.