Solidigm, SK Hynix's grand-subsidiary specializing in NAND flash (hereinafter referred to as NAND), which was once called a "troubled finger," has found an opportunity for a turnaround amid expanding demand for AI (artificial intelligence). Expectations for a revaluation of its corporate value have also grown as demand for eSSDs (enterprise solid-state drives) surges. It is projected that if a U.S. stock market listing materializes, it will add momentum to SK Hynix's expansion of its U.S. business.
Solidigm was established in 2021 after SK Hynix acquired Intel's NAND and SSD businesses. The company name was derived from "SSD" and "paradigm." Contrary to its ambition to change the paradigm of the NAND market, it struggled with poor performance due to a downturn in the early stages of its launch. Cumulative losses from 2022 to 2023 reached 730 billion won.
The expansion of investments in AI data centers became Solidigm's turning point. This is because the spread of generative AI led to a surge in data required for training and inference, establishing eSSDs as a core solution supporting AI computations. Global investment bank JPMorgan predicted that by 2027, eSSDs will account for 48% of global NAND bit demand. It is observed that eSSDs will emerge as the largest source of NAND demand, surpassing smartphones (30%) and PCs (22%). This is the background behind assessments that Solidigm's strategic value will increase as AI infrastructure investments expand, given its strength in high-performance eSSDs.
Solidigm is expected to play a significant role in SK Hynix's expansion of its U.S. business as well. Earlier this year, SK Hynix announced plans to restructure "SK Hynix NAND Product Solutions" (formerly Solidigm) and establish an "AI Company." The concept involves expanding beyond memory supply into the AI solutions business through investments and collaborations with local AI companies. The existing NAND and SSD businesses will be handled by a newly established Solidigm entity under the AI Company.
Solidigm is expected to support the AI Company's business expansion with its high-capacity eSSD technology and local customer base. SK Hynix stated, "We will place Solidigm under the AI Company to seek opportunities for synergy across various business areas within the AI industry." If a NASDAQ listing materializes, Solidigm will be able to raise investment funds directly from the U.S. capital market. Analysts suggest that adding Solidigm's fundraising capabilities to the AI Company's local investment and collaboration strategies could strengthen SK Hynix's expansion of its U.S. business.
The ability to respond to changes in U.S. trade policy is also an expected factor. As the Donald Trump administration pressures semiconductor companies to invest locally, a NASDAQ listing could serve as a channel for securing funds for production facility investments. SK Hynix currently does not have semiconductor production facilities in the United States. If Solidigm invests IPO proceeds in domestic production facilities, it appears capable of responding to the U.S. government's policy stance demanding expanded local production and strengthening cooperation with customers.
It could also help secure key local talent. By establishing a compensation system utilizing U.S.-listed shares, long-term rewards can be provided to technical personnel through stock options or restricted stock units (RSUs). This effectively increases the means available for attracting talent and preventing attrition in the U.S. market, where big tech and semiconductor companies compete for top talent.
An industry official said, "If investment funds are secured through the local capital market and a talent compensation system based on listed shares is established, the conditions for Solidigm to expand its business and sustain growth in the United States will also be strengthened."
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