A.I. Doubts Leave Chip I.P.O.s Sputtering

SK Hynix has pulled the plug on a planned U.S. IPO for Solidigm, its memory chip subsidiary, and the pre-IPO funding round is off too. The company said recent capital market conditions and share price moves forced it to rethink whether a listing was really the best option for itself and its shareholders.

That is a big retreat. Media reports had said Solidigm could have reached Nasdaq as early as next year, with a deal that might have raised $10 billion to $15 billion at a valuation of up to $150 billion. Instead, SK Hynix is now talking about other funding routes, including direct investment.

Politics in Seoul also complicated the picture. South Korea’s financial regulators said this week that Solidigm fell under new rules aimed at blocking duplicate listings, the kind of move that can dilute existing shareholders. SK Hynix says that was not the direct reason it stepped back, but the pressure was there, and lawmakers from both major parties had already been pushing for tighter shareholder protections.

The timing could hardly be worse. Chip and AI stocks have been sliding hard, with the Nasdaq Composite down 2.6 percent and the Philadelphia Semiconductor Index off 6.7 percent on Thursday. In Asia on Friday, South Korea’s Kospi fell as much as 4 percent intraday and Japan’s Nikkei 225 lost 2 percent. SK Hynix itself was whipsawed, dropping as much as 4 percent before turning positive later in the session.

Solidigm, created in 2021 when SK Hynix bought Intel’s NAND flash and solid-state drive business, is based in California and still manufactures only in Dalian, China. SK Hynix had wanted IPO money to help fund a first plant on the U.S. East Coast, closer to American tech companies hungry for storage in AI data centers. That plan is on ice now, and it is not alone: Firmus pulled its own listing, Oura paused its IPO, and even Elice saw a wild debut before bouncing back.