Seoul:SK hynix Inc. announced on Friday the suspension of its plans to list its U.S. subsidiary, Solidigm, on the stock market, citing current market conditions as the primary reason for the decision.

According to Yonhap News Agency, there had been reports that Solidigm was considering an initial public offering (IPO) in the United States as early as the next year, with potential valuations reaching up to US$150 billion. However, SK hynix has decided to halt its review of a pre-IPO fundraising round and a subsequent IPO.

The South Korean chipmaker emphasized that while it has paused the IPO plans, its commitment to investing in Solidigm's growth remains firm. The company plans to explore alternative strategies to enhance shareholder value. The decision comes amid strong shareholder opposition and concerns from financial regulators over the potential for a separate listing to undermine minority shareholder interests.

There were concerns about a possible "duplicate listing," which could dilute the value of existing shareholders' stakes. Solidigm operates within a complex corporate structure that includes SK Inc., SK Square Co., and SK hynix, leading to fears that a separate listing could exacerbate the holding company discount.

Despite these concerns, SK hynix clarified that the tighter government restrictions on duplicate listings were not the direct cause of the suspension. The decision, according to a company official, was based on the assessment of economic benefits and the need to support Solidigm's growth within the context of current market conditions.

The move follows increased financial market volatility and corrections in semiconductor stocks, with U.S. NAND flash memory maker Sandisk Corp. experiencing a significant share price decline. This market environment prompted questions about Solidigm's ability to achieve its anticipated valuation in an IPO.

SK hynix had viewed the IPO as a means to raise external capital for new production facilities in the U.S. and to meet growing memory demand in the AI era. The company anticipated that a successful listing would enhance Solidigm's growth potential and improve the company's financial flexibility for investments and shareholder returns.

Solidigm, headquartered in California, is a subsidiary of SK hynix specializing in NAND flash memory and solid-state drives, established following the acquisition of Intel Corp.'s NAND flash memory and SSD business in 2021.