SK hynix halts US IPO plan for Solidigm as strain spreads across AI infrastructure markets
South Korea's SK hynix said on Oct. 23 it had stopped reviewing a US listing for its data center SSD maker Solidigm, in a week when neocloud shares slumped and credit risk on AI infrastructure names hit records.
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South Korean memory giant SK hynix, one of the biggest winners of the AI boom, said on Oct. 23 that it had stopped reviewing pre-IPO fundraising and a US initial public offering for its US-based subsidiary Solidigm. SK hynix bought Solidigm, which makes NAND flash and SSD storage for data centers, from Intel in 2021.
"While an IPO was expected to ease investment burdens and expand capacity for shareholder returns, the review has been discontinued in light of market conditions and share price trends," SK hynix said. The Korea Times reported that since reports in August that Solidigm could be valued at up to $150 billion, concerns had grown that a listing would undermine SK hynix shareholder value. Financial Supervisory Service Governor Lee Chan-jin and Financial Services Commission Chairman Lee Eog-weon both said the listing would fall under South Korea's dual-listing guidelines, and industry sources told the paper that government warnings may have weighed more heavily than market conditions.
As CNBC noted, the decision capped a rocky week for the AI infrastructure trade. Shares of neoclouds CoreWeave, Nebius and IREN each fell more than 30% in October, and spreads on CoreWeave's credit default swaps widened past 11%, generally seen as a distress level. Meta reported negative free cash flow of more than $2 billion for the third quarter and its stock fell 7% in a day, while CDS spreads on Meta, Nvidia and Oracle touched records. Research firm Gartner predicts that 80% of neocloud companies will cease operations or be absorbed by 2030.
Nvidia CEO Jensen Huang remained upbeat, saying at a company event in Berlin that "demand for the neoclouds is off the charts" and that the gap between demand for capital and its availability is "going to get solved."
With demand for enterprise SSDs used in AI data centers still growing, expanding Solidigm's US production capacity remains a priority. SK hynix said it would keep exploring financing options to support Solidigm's growth and did not rule out an IPO in the future.
Sources: CNBC, The Korea Times, SK hynix Newsroom. Image: Yonhap (via The Korea Times).
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