Key points
- SK Hynix's US NAND subsidiary Solidigm is raising 5 trillion won ($3.5B USD) to 10 trillion won ($7.1B USD) from global investors, aiming for a value near 50 trillion won ($35.3B USD) ahead of a possible Nasdaq listing.
- The push surfaced four days after Korea's new rule on subsidiary listings took effect August 3, a rule built to require a parent company's shareholders to approve a spinoff listing.
- Solidigm wasn't created through a Korean spinoff. SK Hynix bought it from Intel, then moved it under a new holding company called AI Company in January. Under the new rule, that likely means a shareholder vote is only recommended for Solidigm's listing, not required.
- SK Hynix filed an official response August 5 saying nothing is confirmed. Its stock fell 10.37% Thursday and another 4.88% Friday, closing at 1,422,000 won ($1,004 USD).
On August 5, SK Hynix filed a short response to a report that its American chip subsidiary was preparing to go public. "Our overseas subsidiary Solidigm is reviewing various measures to strengthen competitiveness, but nothing is confirmed at this time," the company said, and promised another disclosure by September 4. Two days later, that subsidiary looks like the first real test of a rule Korea finished writing four days earlier.
What Solidigm is raising
Solidigm is the NAND flash and enterprise storage business SK Hynix bought from Intel. It reported heavy losses in past years and has more recently turned profitable, helped by AI datacenters buying up enterprise storage. Investment bank sources told Korean press the company is now raising 5 trillion won ($3.5B USD) to 10 trillion won ($7.1B USD) in a pre-IPO round from global alternative asset managers and foreign sovereign wealth funds, with Morgan Stanley and Goldman Sachs leading the effort. The target is a value near 50 trillion won ($35.3B USD) once Solidigm lists on the Nasdaq. Solidigm has already hired chief compliance officers to prepare for US securities requirements, a sign the plan is further along than a rumor.
A rule four days old, and a gap already in it
Korea's Financial Services Commission finalized a new set of rules on subsidiary listings on July 31, and they took effect August 3. The rules target what Korean regulators call duplicate listing, when a company lists a subsidiary separately and the parent's own shareholders end up with a smaller, less valuable claim on the same underlying business. Where a subsidiary was created by splitting off part of a Korean company, its listing now needs a shareholder vote at the parent, under a "3% rule" that caps any single shareholder's vote at 3% of the total, controlling shareholders included, plus support from more than a quarter of all outstanding shares, not just a majority of whoever shows up. Parent-company boards face five separate duties before a subsidiary can list, ending in a public disclosure, and the same five duties apply whether the subsidiary lists in Korea or overseas. The FSC said it plans to keep updating the guideline as real cases come in, "to enhance predictability for companies and investors and the rationality of operations."
Solidigm wasn't created that way. SK Hynix bought it from Intel years ago, and in January moved it under a new holding company, AI Company, on its way toward an independent US listing. Because Solidigm never went through a Korean spinoff, its listing likely falls into the rule's other category, subsidiaries listed for reasons besides a domestic split, where a shareholder vote is recommended rather than required. Skip the vote, and Solidigm's listing gets a tougher individual review from the Korea Exchange instead of a hard requirement to stop. That review only goes so far anyway. A Nasdaq listing is approved by the Securities and Exchange Commission and Nasdaq itself, not the Korea Exchange, so Korea's own listing standards don't have the power to formally approve or block it once Solidigm's paperwork is with US regulators.
The market's already split on it
Solidigm gets to raise its own money instead of leaning on SK Hynix, on the largest capital market in the world, at a moment when AI datacenter demand for enterprise storage is strong. That's the pitch behind the listing. What worries some investors is different. Splitting off a core part of the business can make the whole group worth less than its pieces once outsiders get to price them separately, and SK Hynix's own Nasdaq listing in July hasn't lifted its own stock much either. The report happened to land the same day SK Hynix's stock fell more than 10%, a drop this site already covered as a broader chip-stock and sidecar move. Some investors are reading part of that drop as new-listing anxiety anyway.
SK Hynix fell 10.37% Thursday, then another 4.88% Friday after a report that Nvidia might cut back memory in its next AI chip, closing at 1,422,000 won ($1,004 USD). Solidigm's next scheduled update is September 4, the deadline SK Hynix set for itself in its August 5 response. Whether that update includes a shareholder vote, or just a tougher review from an exchange that can't block a Nasdaq filing anyway, is the real test the new rule is about to face.
Sources
- 다음(한국경제), 하이닉스 자회사 '솔리다임' 나스닥 추진…'중복상장 가이드라인' 시험대, on Solidigm meeting three criteria that make it a test case for the new rule
- 뉴스핌, 솔리다임 5조 프리IPO설, SK하이닉스 "확정된 사항 없다", on SK Hynix's August 5 official response and the September 4 re-disclosure deadline
- 헤럴드경제, 중복상장 개선 방안, 내달 3일부터 시행…물적분할 시 주주동의 의무·'3%룰' 준용, on the duplicate-listing guideline's shareholder-approval requirements
- 오피니언뉴스, on the bull and bear case for Solidigm's listing among investors
- Our earlier coverage: SK Hynix's separate shareholder-return denial, Friday's Nvidia memory report
Figures are converted at approximately 1,416 won to the US dollar. Quotes originally in Korean are translated. This is general market commentary and not investment advice.
