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SK Hynix's Solidigm listing sparks overlapping Controversy. Solidigm's $100B valuation raises shareholder concerns over diluted stakes, regulatory gaps in overseas listings Updated 2026.10.18. 15:49 Controversy over overlapping listings is growing as Solidigm, the U.S. grandchild company of SK Hynix, pushes for a Nasdaq listing next year. Bloomberg reported on October 7 (local time) that Solidigm has appointed Goldman Sachs and Morgan Stanley as lead underwriters. It is discussed that the company will raise 10 billion dollars through a public offering, and its enterprise value could reach up to 100 billion dollars after listing. Solidigm is a company established in the U.S. by SK Hynix, which acquired Intel's NAND flash business for 9 billion dollars. It manufactures storage devices (SSDs) for data centers. Its first-half sales this year were 12.25 trillion Korean won, accounting for about 9% of SK Hynix's total sales. On August 5, SK Hynix disclosed, "Solidigm is reviewing measures to strengthen competitiveness, but nothing has been finalized." It reiterated the same stance in a re-disclosure on September 4. However, movements interpreted as preparation for listing continue. Solidigm recently hired Andres Castillon, a former Qualcomm executive, as vice president of government affairs. Government affairs involve dealing with regulatory bodies. This is the first time since Solidigm's launch in 2021 that it has appointed a head of government affairs. Castillon will also handle matters related to the Committee on Foreign Investment in the United States (CFIUS), which reviews foreign investments. Investment banking (IB) circles suggest Solidigm raised 5 billion dollars in pre-IPO funding. Overlapping Listings, Concerns Over Reduced Shareholder Stake Overlapping listings refer to a parent and subsidiary being listed simultaneously. Above Solidigm are the U.S. intermediate entity AI Company, SK Hynix, SK Square, and SK Inc. Among these, SK Hynix, SK Square, and SK Inc. are already listed in South Korea. If Solidigm is listed, four companies in a single lineage will be publicly traded. The Korean Corporate Governance Forum criticized this as "an unprecedented five-tier overlapping listing attempt globally," meaning five companies from SK Inc. to Solidigm are linked. Shareholders worry their stakes will shrink. Currently, all profits from Solidigm go to SK Hynix. If Solidigm issues new shares to external investors, profits must be shared. There is also the issue of Solidigm's value, previously reflected in SK Hynix's stock price, shifting to Solidigm's stock. SK Hynix also noted in a June filing with the U.S. Securities and Exchange Commission (SEC) that a subsidiary's listing could negatively impact its stock price. On August 6, immediately after the listing speculation surfaced, SK Hynix's stock price fell over 10% in a single day. Regulatory gaps exist. The Financial Services Commission and Korea Exchange implemented overlapping listing guidelines on August 3, requiring parent companies to assess impacts on shareholders and prepare protection measures. These obligations apply to overseas listings. However, the exchange's ability to screen overseas listings is limited. Since Solidigm is listing on Nasdaq, not the Korea Exchange, the exchange cannot enforce these guidelines. Penalties for violating listing contracts are capped at 1 billion Korean won per company. Overseas regulations are also lax. The Fair Trade Act mandates that a holding company's grandchild must own 100% of domestic affiliates, and great-grandchildren cannot hold domestic affiliate shares. This prevents endless expansion of corporate hierarchies. However, these rules apply only to domestic affiliates. As U.S. entities, AI Company and Solidigm are exempt. The Fair Trade Act requires disclosing shareholders of overseas affiliates but does not restrict expanding hierarchies through foreign entities. Conflicts of Interest Over Pre-IPO Investments by Former CEO's Fund and Affiliates Suspicions surround pre-IPO equity investments. Former SK Hynix President No Jong-won established the private equity firm Techbridge Investments in the U.S. No led SK Hynix's acquisition of Intel's NAND business as chief financial officer in 2020 and served as Solidigm's co-CEO from 2023 to 2025. Techbridge registered with the SEC on August 2 (local time). IB circles speculate Techbridge is a key investor in Solidigm's pre-IPO round. SK affiliates' investments are also under scrutiny. SK Inc., SK Innovation, and SK Telecom committed to investing 1.11 billion dollars in AI Company by 2030. Critics argue this was a "preemptive purchase" before the listing's expected value surge. SK Hynix defended it as part of the group's AI strategy. The Governance Forum raised concerns about "wealth transfer." Depending on which company generates profits, Chairman Chey's share varies. Chey directly holds 17.9% of SK Inc. (as of June). Profits from SK Inc. directly benefit Chey, but SK Hynix profits pass through SK Square and SK Inc., reducing Chey's share due to profit-sharing at each tier. This explains why SK Inc. and SK Telecom's investments in AI Company are problematic. SK Telecom, a direct subsidiary of SK Inc., is closer to Chey than SK Hynix. Their purchases were of AI Company shares, not Solidigm. If Solidigm's valuation rises post-listing, AI Company's value increases. If SK Inc. and SK Telecom bought these shares cheaply pre-listing, the gains would benefit them - not SK Hynix shareholders, who would have otherwise shared the profits. Post-listing transactions between SK Hynix and Solidigm could also be contentious. Solidigm reportedly sources wafers (semiconductor substrates) from group affiliates. Currently, pricing has minimal impact since Solidigm's profits mostly flow to SK Hynix. Post-listing, however, cheap wafer transfers would reduce SK Hynix's profits and increase Solidigm's, benefiting external shareholders. Conversely, expensive transfers would harm Solidigm shareholders. Business Circles: "Attracting Overseas Capital Benefits the Group" Counterarguments exist. Business circles and some securities analysts view the listing as a way to recover and reinvest funds from the Intel acquisition. Kim Young-gun, a Mirae Asset Securities researcher, stated, "It is reasonable to see this not as an overlapping listing but as a means to recover M&A investment and secure funds for future investments." If the company valued at 9 billion dollars achieves over 11 times its acquisition price, most gains would go to SK Hynix shareholders, who hold controlling stakes. Domestic fundraising is challenging. Another way to fund Solidigm is through SK Hynix's rights offering. However, SK Square, the largest shareholder of SK Hynix, holds just over 20% of its shares. The Fair Trade Act requires SK Square to maintain at least 20% ownership. If SK Hynix issues new shares, SK Square must invest to retain its stake. Conversely, listing Solidigm allows SK Square to preserve control without additional investment, as new shareholders fund the company. The key is convincing SK Hynix shareholders. They ask two questions: First, why list Solidigm separately? Solidigm is reportedly considering building a new NAND factory in the eastern U.S. Kwon Jae-yeol, a professor at Kyung Hee University Law School, said, "Using listing funds to expand U.S. NAND facilities would ultimately boost SK Hynix's value." Second, how will reduced shareholder stakes be compensated? The impact depends on the number of new shares issued and whether existing shares are sold back to the parent. If cash from the listing is returned to shareholders via dividends or buybacks, losses can be mitigated. Lee Young-gon, head of Toss Securities Research Center, said, "Capital allocation principles and shareholder return policies must be presented together." · This article has been translated by Upstage Solar AI. Editor's Pick

SK hynix reportedly offers to build a NAND fab in the US if Washington lets it expand in China. Extra NAND sales from Dalian could help fund the US fab, and Solidigm is considering an IPO as early as 2027. Serving tech enthusiasts for over 25 years. TechSpot means tech analysis and advice you can trust. Rumor mill: Solidigm can make more NAND flash at its Dalian factory in China and has buyers for every SSD it produces. What it lacks is US approval to bring in more chipmaking equipment. Parent company SK hynix is reportedly offering to build a NAND fab in the United States in exchange for permission to ship additional tools to Dalian. The proposal could help Solidigm increase production of the flash memory used in its data center solid-state drives while giving Washington a commitment to new American semiconductor manufacturing. The equipment would go into unused space in Dalian's Mod B building. Completed in 2023, the building was never fully equipped because of the memory market downturn. Some tools are installed, but much of the space remains available. For Solidigm, leaving that space idle limits sales. The company sells every SSD it makes, and more NAND output would let it supply more drives. The Dalian plant is the only factory in the world producing Solidigm's 192-layer floating-gate 3D NAND. That memory goes into SSDs for AI, enterprise and hyperscale data centers. The factory relies on equipment made by US suppliers, including Applied Materials, KLA and Lam Research. Those companies need export licenses to ship their tools to China. US policy has generally allowed some equipment deliveries to Chinese factories operated by multinational companies such as SK hynix and Samsung. But Washington wants those plants to keep operating without increasing output or adopting newer manufacturing technology. That leaves an important question about the Dalian proposal. Installing tools in Mod B would complete the existing factory rather than expand it, because the building was finished in 2023. Even so, equipping the unused space would increase production. The building's completion date does not resolve how US officials will assess the equipment requests. Solidigm has applied for the licenses, but the Commerce Department has not approved additional shipments. Last December, the Commerce Department granted SK hynix limited authorization to deliver equipment to Dalian in 2026. It has not issued a similar authorization for 2027. The licensing talks come as Solidigm develops successors to its current 192-layer memory. At Computex 2026, Avi Shetty, who leads the company's AI solutions and ecosystem business, said Solidigm planned to develop fifth- and sixth-generation floating-gate NAND. He also emphasized factory utilization and profitability. He did not announce plans for increased production at Dalian or a US fab. Increasing output and introducing a new NAND generation are separate steps. Installing more equipment could let Solidigm produce more of its existing memory. Moving to a newer manufacturing process could require different permissions under US export rules. The proposal does not specify which NAND generation an American factory would produce, nor does it establish whether additional licenses for Dalian would cover equipment needed for future generations. Solidigm has outlined its technology plans, but the manufacturing arrangements behind them remain unsettled. Increased production at Dalian could help finance the proposed American factory. Profits from additional NAND sales could contribute to construction costs and support Solidigm until US production becomes available. The company is also considering an initial public offering as early as 2027 to raise capital. For the Trump administration, a US NAND fab would fill a gap in domestic chip production, as no company has manufactured NAND flash in America for years. SK hynix's proposal would tie that investment to continued access to American equipment for its Chinese operation. None of those steps are final. The US factory remains a proposal, the equipment requests are awaiting approval, and the IPO is under consideration. Solidigm's immediate priority is getting tools into the Dalian space it already has. Its next challenge is securing the manufacturing capacity - and regulatory approvals - to bring later generations of floating-gate NAND into production. See more TechSpot in Google Add us as a preferred source and our reporting shows up first when you search.