SK Hynix halted an initial public offering (IPO) review for its Solidigm unit, which still needs a new US fab. Shares dropped as much as 3% before recovering most of the loss and then finishing the day up 4%.
South Korea's Financial Supervisory Service (FSS) said Monday that a US listing could breach rules restricting dual listings, CNBC reported. SK Hynix, however, pointed to market turbulence.
Did Regulators or Markets Drive the Solidigm IPO Halt?
Solidigm's factories have little room to expand output as AI memory demand climbs.
FSS Governor Lee Chan-jin said officials were weighing whether the IPO needed review under minority shareholder protection rules.
SK Hynix has surged today. Source: TradingView In its statement, SK Hynix said a semiconductor stock correction prompted a rethink of whether an IPO suited shareholders.
The company said neither Solidigm's outlook nor its investment needs have changed.
Can SK Hynix Fund a US Fab and Bigger Payouts?
SK Hynix had viewed an IPO as a way to fund factories while sustaining dividends and buybacks that retire shares.
Separately, a listing could have valued Solidigm on its own, a growth story SK Hynix says its valuation misses.
Payouts were already rising, as the board approved a 40 trillion won buyback and share cancellation program in August.
The company also raised its return target to over 50% of cumulative free cash flow through 2027.
The statement names no replacement for the IPO. SK Hynix is still deciding when, how much, and how to finance any investment.
Meanwhile, the Korea Composite Stock Price Index (KOSPI) had already faced a chip-led AI selloff earlier this week.
In the US, the Nasdaq Composite lost 2.6% Thursday, its weakest session since June, CNBC reported.
AI data center operators also slid, with CoreWeave down 10% Thursday and Australia's NextDC nearly 40% lower Wednesday.
In contrast, Nvidia CEO Jensen Huang told CNBC he does not expect a memory chip glut by 2029.
SK Hynix said it would detail payout plans with its third-quarter results, which a filing shows are due Oct. 28.
Korea's chip exports rose 222.5% from a year earlier in early October. Yet the KOSPI fell 20.72% in 10 sessions through Oct. 20.
Read the Original story SK Hynix Weighs Shareholder Returns Against Growth Capital After Solidigm IPO Halt. Stock Jumps 4% by Darryn Pollock at beincrypto.com