SK Hynix Considers Promoting Solidigm's US IPO Amidst Growth and Challenges
TapTechNews July 29th news, comprehensively reported by foreign media such as the Korean Economic Daily (Hankyung) and Blocks&Files, SK Hynix is considering promoting the US IPO of its NAND flash memory and solid state drive subsidiary Solidigm.
SK Hynix announced the acquisition of Intel's NAND and SSD business in October 2020, and Solidigm is an independent US subsidiary established by SK Hynix after completing the first stage of the acquisition at the end of 2021.
Due to the combined influence of internal and external factors, Solidigm fell into consecutive losses shortly after its establishment, with a negative net profit for 12 quarters starting from the second quarter of 2021.
However, recently due to the rapid growth of server demands such as AI inference, the performance of Solidigm, which has a leading position in enterprise-level solid state drives, has also gradually improved, and the net profit also returned to positive after achieving a positive operating profit in the first quarter of this year.
The Korean media said that Solidigm is one of the few companies that can provide super-large-capacity (64TB-level) QLC enterprise-level solid state drives. Giants such as Amazon, Google, and Dell are scrambling to place orders with Solidigm in order to obtain hard drive supplies before their competitors.
In addition, SK Hynix and Solidigm also plan to launch a 128TB raw capacity enterprise-level solid state drive early next year, and a 256TB product is also in preparation.
In order to deal with the continuously increasing enterprise-level demand, Solidigm urgently needs funds to expand its business; on the other hand, SK Hynix is about to pay the $2 billion (currently about 14.536 billion yuan) in the second stage of the acquisition case to Intel in March 2025, and also needs to recover some funds.
In this context, senior executives within the SK Group have proposed a plan to promote Solidigm's listing in the US. The Korean media estimates that the market value of Solidigm is expected to reach 20 trillion to 30 trillion won (TapTechNews note: currently about 104.86 billion to 157.29 billion yuan).
Wedbush analyst Matt Bryson said:
We think this news is credible because SK Hynix had a plan to spin off Solidigm before, and the recent recovery of this company makes this option more feasible.
We believe that whether SK Hynix's efforts can succeed will depend on how the new organization is split (for example, which assets are included in Solidigm and which assets SK Hynix retains), and how Hynix/Solidigm discuss future technical plans.
In particular, considering the existing road map of Dalian NAND - including QLC components, which have enabled Solidigm's recent success in large-capacity enterprise-level solid state drives - it seems to end at 196 layers.