SK Hynix’s Solidigm IPO: A Strategic Move Amidst Rising Memory Demand

With the recovery of the memory market, SK Hynix’s revenue has swiftly emerged from the shadow of twelve consecutive quarters of losses, returning to a growth trajectory in a short period. The second-quarter financial report for 2024 shows that SK Hynix’s quarterly revenue reached a record high, with operating profit returning to the 5 trillion KRW level for the first time since 2018. To solidify its global leadership in AI-targeted memory, SK Hynix recently announced an investment of approximately 9.4 trillion KRW to construct the first fab and business facilities at the Yongin Semiconductor Cluster in South Korea.

According to TrendForce, in addition to this large-scale investment, SK Hynix is also contemplating another significant move: taking its subsidiary Solidigm public, with plans for an initial public offering (IPO) in the United States. Given the rising market conditions for DRAM and NAND flash products, listing Solidigm appears more feasible than the previously rumored spin-off.

There are rumors that SK Hynix intends to use the proceeds from Solidigm’s IPO to secure internal cash flow to support its large-scale capital expenditure plans. Further reports suggest that the success of SK Hynix’s plans for Solidigm might depend on the organizational structure of the new entity, such as which assets will be included in Solidigm, which will be retained by SK Hynix, and how both entities will address future technological strategies. Considering Solidigm’s recent success in high-capacity enterprise-level QLC SSDs, these aspects become crucial.

SK Hynix has responded to these reports, indicating that Solidigm is exploring various development plans but has not yet made any definitive decisions.

On October 19, 2020, Intel sold its NAND flash and storage business to SK Hynix for $9 billion. This transaction included Intel’s SSD business, NAND components, and wafer business, as well as the NAND flash manufacturing facility in Dalian, China, though Intel retained its Optane business. By December 29, 2021, Intel confirmed receipt of the initial $7 billion payment from SK Hynix, which acquired Intel’s NAND flash business, including the Dalian facility. The transaction is set to be fully completed in March 2025, with SK Hynix paying the remaining $2 billion to purchase the remaining assets, which include NAND flash manufacturing and design, R&D teams, and the Dalian wafer plant workforce.

These operations will be transferred to a new company named Solidigm, a subsidiary of SK Hynix, headquartered in San Jose, California.