SK hynix has decided to stop pursuing a listing of Solidigm. SK hynix said on Oct. 23 it is halting both a pre-IPO stake investment and an initial public offering review for Solidigm, its U.S. subsidiary. The company added its assessment of growth potential and investment needs has not changed. It said it needs to reassess whether listing now is best for SK hynix and existing shareholders given capital market conditions and stock price trends.

SK hynix said Solidigm is seeing rising memory demand as AI spreads, but existing plants cannot handle the volume. As a company based in the United States, it is in a situation where any new plant must also be built in the United States. SK hynix has compared options, including direct investment and raising external funds through an IPO, to secure the required investment resources and allocate capital efficiently.

The initial idea was that bringing in outside capital through an IPO would increase SK hynix’s consolidated cash flow, allowing it to fund capital expenditure, dividends and share buybacks and cancellations at the same time. It also aimed for the market to revalue Solidigm’s growth potential, which it said is less reflected in SK hynix’s share price. The company said the IPO was an option that could provide Solidigm with growth funding and SK hynix with a way to enhance shareholder value.

But changes in the financial market environment became a variable for the listing. As market volatility has recently increased, semiconductor stocks broadly came under correction. The company said that based on business performance alone, both SK hynix and Solidigm are on a solid track. Solidigm decided to drop its review of both the pre-IPO and the IPO after considering the overall management environment.

The IPO has stopped, but expanding Solidigm’s production capacity and strengthening competitiveness remain tasks. SK hynix plans to review again the timing and size of investment and how to raise the funds. SK hynix said it will continue to seek ways to boost Solidigm’s growth and the interests of existing shareholders at the same time.