Chipmaker says internal and external funding remain options, pledges to prioritize long-term shareholder value
SK hynix said Thursday that no decision had been made on the future operation or financing of its US NAND subsidiary Solidigm, seeking to reassure investors amid concerns that a separate listing could undermine shareholder value.
Speculation over Solidigm has grown as the chipmaker considers how to fund further investment in the subsidiary. Some investors have raised concerns that taking the subsidiary public while SK hynix remains listed could dilute the value of existing shareholders’ holdings.
“Nothing specific has been decided regarding Solidigm,” SK hynix said in a statement, reiterating an earlier regulatory filing that said it was reviewing options to strengthen the subsidiary’s competitiveness.
The chipmaker also stressed that any decision on funding would be assessed in light of its impact on existing shareholders.
Solidigm was formed following SK hynix’s acquisition of Intel’s NAND flash memory and solid-state drive business. The US-based unit now focuses on high-capacity enterprise SSDs for artificial intelligence data centers and is reviewing investments to expand production capacity and strengthen its technological competitiveness.
SK hynix said it had sufficient financial resources to fund investments internally, but added that using its own cash would not necessarily be the best option.
The chipmaker is balancing investment needs across businesses including high-bandwidth memory, server DRAM and enterprise SSDs. Given the capital-intensive and cyclical nature of the memory industry, the company said financing decisions should take into account market conditions, investment timing and its broader capital allocation strategy.
Any external financing option, however, would be closely weighed against internal funding, particularly in terms of its effect on existing shareholders, the company said.
Reuters recently reported that Solidigm had held “bake-off” meetings with investment banks to hear proposals for managing a potential initial public offering, and could seek a US listing as early as next year.
The Korea Corporate Governance Forum, a nonprofit organization founded by activist investors, has also called for the company to halt discussions, arguing that listing Solidigm through the existing SK-SK Square-SK hynix ownership chain and a US entity would effectively create a five-tier multiple-listing structure.
“Enhancing long-term corporate and shareholder value will be the most important criterion, regardless of which option we consider,” SK hynix said.
If a concrete plan is pursued, the company said its board would closely review the financial and business implications, comply with relevant rules and procedures, and consider measures needed to protect existing shareholders before moving forward.
yeeun@heraldcorp.com