The specter of dual listing has descended upon SK Hynix. This follows news that the company is pushing for a NASDAQ IPO of Solidigm (formerly Intel's NAND business division), its U.S. subsidiary specializing in eSSDs (enterprise solid-state drives). With national attention focused on the stock prices of "Samsung-Nix" [a portmanteau referring to Samsung Electronics and SK Hynix], scrutiny is even sharper. The argument is that by separately listing a core asset to attract new investors, existing shareholders suffer losses; however, counterarguments stating this is necessary for growth are equally substantial. This is the backdrop for voices calling for careful examination of specific cases to distinguish between valuable and worthless assets amid recurring dual listing controversies.
Separating a company's important assets into a separate legal entity for listing is a typical dual listing. In that regard, this Solidigm IPO is different. It is not a method of separating a core growth business for a separate listing, but rather the procedure of listing an acquired overseas subsidiary locally. This is also a method employed by global tech companies such as Intel.
It is not a matter of stripping away SK Hynix's foundation. As of 2021, just before the listing of LG Energy Solution, the revenue and asset share of LG Energy Solution-related businesses within LG Chem was in the 40th% range, but Solidigm's ratio is less than 10%.
Moreover, what is more important is "the value of the equity" rather than the number "equity ratio." The argument is that even if the parent company's equity is diluted, if timely investment proceeds with funds raised through the listing, the growth potential of SK Hynix and Solidigm will increase, ultimately increasing shareholders' stock value.
Solidigm's corporate value, which has not been properly evaluated while being overshadowed by SK Hynix until now, can also be re-evaluated. With the surge in demand for AI (artificial intelligence) servers, a structure is forming in the eSSD market where supply cannot keep up with demand. According to foreign media, Solidigm's post-listing value is estimated at $100 billion to $150 billion, despite having been acquired for just $9 billion.
Nevertheless, one might still ask why "listing" is necessary. There are points raised that investment could be made with internal funds or borrowing. However, the semiconductor industry landscape is changing now. Simultaneous large-scale investments in HBM (High Bandwidth Memory), DRAM, and NAND are desperately needed. Considering only the investment plans announced by SK Group since the beginning of this year, it must raise a whopping over 1,000 trillion won in the medium to long term. It is a situation where all possible means and methods, including retained cash as well as IPOs and corporate bond issuance, must be mobilized to find the optimal combination.
If we impose the dual listing frame on our companies and immobilize them, only China can laugh. This is because Chinese companies are exploiting the gap as "Samsung-Nix" production capacity fails to meet demand, thereby expanding their foothold.
Hwang Yong-sik, Gyeong Yeong-hak-bu (Prof.) at Sejong University, emphasized, "Unlike a typical carve-out listing where an existing business division is separated and listed, Solidigm started differently as an overseas business launched by acquiring Intel's NAND and SSD (solid-state drive) businesses." He added, "In the AI semiconductor competition, investment speed and flexibility in capital raising are important, so judgment should be centered on the utilization of raised funds and whether existing shareholder value is enhanced, rather than questioning the listing itself."
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