SK Hynix trims losses after suspending chip unit Solidigm's IPO plans

Shares of South Korean chipmaker SK Hynix trimmed their losses on Friday morning after the company decided to suspend its review of a potential US initial public offering for its subsidiary, Solidigm.

The stock bounced back from an earlier 3% decline to trade 0.3% lower.

“Solidigm will halt its review of potential pre-IPO and IPO options,” the company said in the statement after assessing recent capital market conditions and share price trends, while also exploring various funding options to finance a new U.S. semiconductor fabrication plant amid growing demand for AI memory.

The chipmaker said a potential IPO could have supported Solidigm’s expansion and enhanced financial flexibility to reward shareholders through dividends, share buybacks and share cancellations.

The company also said that Solidigm’s existing production facilities had limited capacity to meet rising AI-driven memory demand, underscoring the need for additional manufacturing capacity in the U.S.

"This decision does not reflect any change in Solidigm’s growth prospects or investment needs. Rather, in light of recent capital market conditions and share price trends, Solidigm determined that it was necessary to reassess whether an IPO would be the most beneficial option for SK hynix and its existing shareholders at this time."

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