DRAM and NAND fabricator SK hynix is looking at a US IPO for its Solidigm subsidiary, according to a report in Korea’s Hankyung media outlet.
Update: SK hynix comment added. 29 July 2024.
SK hynix bought Intel’s NAND and SSD division in October 2020 in a two-phase deal. The first saw SK hynix acquire Intel’s SSD business and NAND fabrication plant in Dalian, China, for $7 billion. The second has SK hynix paying Intel an additional $2 billion in 2025 for IP concerning NAND flash wafer manufacture and design, R&D employees, and the Dalian fab workforce. SK hynix named its acquired business Solidigm and has developed and shipped successful products such as the D5-P5336 61.44 TB QLC (4bits/cell) SSD.
Hankyung’s report says that Solidigm has made its first profit after 12 loss-making quarters.
SK hynix has just reported record earnings driven by strong demand for high bandwidth memory (HBM) chips needed by Nvidia for GPU servers. The company is increasing its memory manufacturing capacity, and will invest about ₩9.4 trillion ($6.8 billion) in building an HBM fabrication plant at the Yongin Semiconductor Cluster, located at a 4.15 million square meter site in Wonsam-myeon, Yongin, Gyeonggi Province, Korea. The fab construction will start in March 2025 and finish May 2027. The intention is then to add three more plants one after the other to the cluster.
This represents a significant capital investment and the $2 billion due to be paid to Intel next year adds to SK hynix’s capital outflow in 2025.
VP Kim Young-sik, Head of Manufacturing Technology at SK hynix, stated: “The Yongin Cluster will be the foundation for SK hynix’s mid to long-term growth and a place for innovation and co-prosperity that we are creating with our partners. We want to contribute to revitalizing the national economy by successfully completing the large-scale industrial complex and dramatically enhancing Korea’s semiconductor technology and ecosystem competitiveness.”
Commenting on the rumoured IPO, Wedbush analyst Matt Bryson tells subscribers: “We see this news as plausible with SK hynix having previously had plans to separate Solidigm, with the entity’s recent recovery making such an option far more viable. We see SK’s success in such an endeavor as likely to be governed by how the new organization is broken out (e.g. what assets are included within Solidigm vs being kept by SK) and how hynix/Solidigm talk to future technology plans, particularly given the current roadmap for NAND at Dalian (including the QLC parts that have enabled Solidigm’s recent success with high capacity enterprise SSDs) seemingly ends at 196 layers.”
A Solidigm IPO would enable SK hynix to receive cash for some of its holdings in the company and help cover the planned capital outgoings. We have asked both SK hynix and Solidigm to comment on the IPO report and will add any responses to this story when they come in.
An SK hynix spokesperson told us: “Solidigm is exploring various growth strategies, but no decision has been made at this time.”
