Solidigm's Potential US Listing Sparks 'Double Listing' Controversy... How Will SK Hynix Persuade Shareholders?

[Anchor]

Controversy is swirling around Solidigm, a sub-subsidiary of SK Hynix that manufactures data center storage solutions. Following reports that the company plans to list on the US market next year, concerns have been raised that this could effectively amount to a dual listing.

Reporter Kim Hye-min has the details.

[Reporter]

Back in 2021, SK Hynix acquired Intel's NAND and SSD business to launch Solidigm.

Controlled through its US intermediate holding company AI Company, the sub-subsidiary produces storage devices essential for data centers.

Foreign media outlets report that Solidigm has selected underwriters to oversee its listing and is pushing to enter the US market.

Solidigm's corporate value is estimated at up to $150 billion, with the amount to be raised through its initial public offering projected at up to $15 billion.

However, this has sparked a double-listing controversy.

In the ownership structure running from SK Inc., SK Square, SK Hynix, and AI Company down to Solidigm, a public listing of Solidigm would mean four listed companies within a five-tier structure.

If Solidigm issues new shares and sells them to external investors, profits would have to be shared accordingly, potentially diminishing the value of its parent companies.

In fact, right after reports of the potential listing first broke in early August, SK Hynix shares plummeted by more than 10% in a single day.

Governor Lee Chan-jin of the Financial Supervisory Service stated during today's parliamentary audit that Solidigm's listing constitutes a dual listing.

[Lee Chan-jin / Governor, Financial Supervisory Service: Our stance at the Financial Services Commission and the Financial Supervisory Service is that we view this as falling under a dual listing.]

If deemed a double listing, the SK Hynix board of directors will be subject to five major obligations—such as assessing the impact on shareholders and devising shareholder protection measures—though a direct shareholder consent procedure is not legally required.

Some, including Bloomberg, offer positive interpretations, noting that the move is beneficial in that Solidigm can secure its own investment capital without relying on funds from its parent company.

[Kim Kwang-seok / Adjunct Professor, Graduate School of International Studies, Hanyang University: Because foreign investors can also invest from abroad, it has the effect of depriving existing investors of room for stock price growth. From the company's perspective, it could serve as a means to raise more capital.]

Now that financial authorities have clarified their stance that the move constitutes a dual listing, successfully persuading existing shareholders of the necessity of the listing is expected to be the critical turning point.

(Video Editing: Ahn Ye-jin, Design: Jegal Chan, Park Cheon-woong)
※ Please note: This article was translated by AI and may contain errors.