SK hynix said Friday that it has suspended its review of an initial public offering (IPO) and pre-IPO for Solidigm. The decision was made after considering recent capital market conditions and stock price trends.
However, the company said it will continue to explore investment options to expand Solidigm's production capacity and strengthen its competitiveness.
Regarding the suspension of the IPO review, SK hynix said, "This is not because Solidigm's growth potential or the need for investment has changed."
The company added, "Considering recent capital market conditions and stock price trends, we determined it necessary to re-examine whether an IPO at this time would be the most advantageous choice for SK hynix and its existing shareholders."
The increase in memory demand driven by the expansion of the AI (artificial intelligence) market presents a new growth opportunity for Solidigm as well.
However, the company explained that existing production facilities have limitations in meeting growing demand. SK hynix stated, "Solidigm, which is based in the United States, is in a situation where it needs to secure new production facilities within the U.S."
Accordingly, SK hynix has been comparing and reviewing various options, including direct investment and external capital raising through an IPO, to secure investment funds necessary for Solidigm's growth and allocate capital efficiently.
The company viewed that raising external capital through an IPO would increase cash inflow on a consolidated basis, securing the capacity for facility investments, dividends, share buybacks and cancellations, and other shareholder returns.
It also considered that if appropriate corporate valuation is recognized, Solidigm's growth potential, which has not been fully reflected in SK Hynix's current corporate valuation, could be re-evaluated by the market.
SK hynix emphasized, "The IPO review was one of the options to secure new growth resources for Solidigm and enhance shareholder value for SK hynix."
However, despite a solid performance trend, the company explained that the need to reassess the pros and cons of pursuing an IPO has grown as volatility in financial markets has recently expanded and semiconductor companies' stock prices have generally undergone correction.
SK hynix stated, "Considering this business environment comprehensively, we have decided to suspend the review of Solidigm's pre-IPO and IPO," while adding, "Expanding Solidigm's production capacity and strengthening its competitiveness remains a critical task."
An SK hynix official said, "We will continue to explore various options that can simultaneously enhance Solidigm's growth and the interests of existing shareholders by reviewing investment timing, scale, and funding methods."
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