SK Hynix Drops Below 1.2 Million Won Despite Halting Solidigm U.S. IPO Review

Down 2.37% in premarket to 1.194 million won

Investor sentiment hit by plunge in U.S. chip stocks

SK Hynix halted its review of a U.S. listing for Solidigm, but the move failed to trigger a rebound in the shares. Even as it eased concerns that a duplicate listing could undermine shareholder value, anxiety over U.S.-led artificial intelligence investment weighed on buying appetite.

As of 8:10 a.m. on Oct. 23, SK Hynix was trading at 1.194 million won on Nextrade's premarket session, down 2.37% from the previous day. The stock had already fallen 5.49% in the regular session on Oct. 22 and extended its weakness in pre-open trading.

The pressure appeared to stem from an overnight selloff in AI-related stocks in the U.S. market. On Oct. 22, the Nasdaq Composite fell 2.60% and the Philadelphia Semiconductor Index slumped 6.7%. Doubts over whether the vast sums being invested in AI infrastructure can generate sufficient returns spread across the semiconductor sector.

Meta's earnings heightened those concerns. Third-quarter revenue rose 26% from a year earlier, but free cash flow posted a deficit of $2.12 billion. The company also raised the lower end of its capital expenditure forecast for this year. Investors focused less on revenue growth than on rising investment costs and the speed of cash burn.

Wariness also surfaced in credit markets. Meta's five-year credit default swap premium rose to 114.79 basis points, the highest level on record. A CDS is a type of insurance against default, and a higher premium means the cost of bearing credit risk has increased.

Against that backdrop, SK Hynix said in a filing before the market opened on Oct. 23 that it was halting its review of a pre-IPO fundraising round and an initial public offering for Solidigm, its U.S. indirect subsidiary. The company said it had considered various financing options to expand production capacity and strengthen competitiveness, but made the decision after taking capital-market conditions into account.

Solidigm's possible listing had drawn pushback from existing SK Hynix shareholders, who said it could damage their interests. The concern was that a separate listing for an affiliate handling a core business could depress the parent company's valuation and require it to share profits with outside investors.

Financial authorities in South Korea had also called for shareholder protection. Kim Byoung-hwan, chairman of the Financial Services Commission, said at a comprehensive parliamentary audit by the National Assembly's Political Affairs Committee on Oct. 22 that Solidigm's overseas listing would also be subject to duplicate-listing guidelines. Lee Bok-hyun, governor of the Financial Supervisory Service, took the same position at a parliamentary audit on Oct. 19.

Solidigm was launched after SK Hynix acquired Intel's NAND flash and solid-state drive businesses in 2021. SK Hynix currently owns 100% of the company through its U.S. intermediate holding company, AI Company.

Separately from halting the listing review, SK Hynix said it still stands by its view on Solidigm's growth potential and the need for additional investment. The company maintains that new production facilities in the U.S. are needed to meet demand for AI memory. It plans to reconsider funding options while continuing to expand its production base.