SK hynix Says on Solidigm: “Nothing Has Been Decided” ... Distances Itself From ‘Dual Listing’ Concerns

SK hynix and Solidigm said there is no finalized plan regarding the “dual listing” controversy. In the market recently, a range of speculation has emerged over Solidigm’s future business operations and capital utilization plans. Some reports linked the possibility of an IPO by Solidigm to the “dual listing” issue and raised the possibility of a “dual listing” involving Solidigm. Other reports also raised concerns that existing SK hynix shareholder value could be undermined.

In response, SK hynix released an explanatory statement on the 1st regarding Solidigm. SK hynix said it is reviewing a range of possibilities for Solidigm’s future business operations and capital utilization plans as a subsidiary. However, it said there have been no specific decisions so far and that it is not reviewing the matter on the assumption of any particular option.

In the statement, SK hynix explained that nothing has been specifically decided at this point. It also said whether to use external capital or internal capital is a matter to be judged comprehensively by taking into account the form of the financing and the economic value of existing shareholders.

SK hynix said in a previous disclosure that it was reviewing measures to strengthen Solidigm’s competitiveness but that nothing had been finalized, and in this statement it reiterated that no specific financing method has been set and that the business structure is also undecided.

Solidigm was launched during SK hynix’s acquisition of Intel’s NAND and SSD business. Solidigm went through a difficult period amid a past downturn in industry conditions, and is now continuing its business centered on high-capacity eSSDs for AI data centers.

SK hynix said Solidigm needs to strengthen its business competitiveness in response to growth in the AI data center market and changes in demand. It also said it is continuously reviewing the need for investment to secure production capacity and technological competitiveness, taking into account market and business conditions.

SK hynix cited the company’s overall investment plan, financial situation, and capital allocation as the criteria for deciding how to use capital related to Solidigm. Its position is that any plan for capital utilization related to Solidigm will be decided after comprehensively considering these factors.

SK hynix said investment demand is arising across multiple business areas, including HBM, server DRAM, and eSSD, so it cannot decide on a financing method based only on investment in a particular business. It explained that the criterion for judging a financing method is whether to choose internal funds or external capital.

The company said it currently has its own financial capacity available for investment. It also said using its own funds is one of the options under review.

However, SK hynix stressed that simply having funds does not mean that self-financing all investments is the best option. It explained that having financial capacity and whether it is optimal to fund all investments with internal funds are separate issues.

SK hynix said the memory industry is a capital-intensive sector in which the industry cycle and the timing of investment have a major impact on competitiveness. Accordingly, it said which method is appropriate, whether internal funds or external capital, should be determined by comprehensively considering market conditions, the timing of investment, and the company’s financial situation.

When deciding on Solidigm’s capital raising plan, SK hynix said it will consider not only whether funds can be secured but also the economic impact on existing SK hynix shareholders.

SK hynix said its criteria for using external capital will include the impact on the economic value of existing shareholders, and that a comparison with using its own funds is necessary. It said that in the process of deciding Solidigm’s capital raising plan, it will consider both whether funds can be secured and the economic effect on existing SK hynix shareholders at the same time.

SK hynix said that if a specific plan is reviewed in the future, it will closely examine the financial and business impact and comply with related rules and procedures.

At the board level, it plans to review the impact of each investment and capital utilization plan. The board will also review the effect on existing shareholders and any measures needed to protect shareholders.

SK hynix emphasized that whichever option is chosen, it will comprehensively consider the economic impact on the company and existing shareholders, the effectiveness of capital utilization, and the financial impact of financing. As a decision-making criterion, it said it will place top priority on enhancing long-term corporate value and shareholder value.

The company said that, as of now, there is no finalized plan regarding Solidigm’s capital raising method or business structure. It added that it will decide on a plan after comprehensively considering these factors in light of future investment needs, SK hynix’s overall capital allocation strategy, and shareholder value.

Source: TECHWORLD · Park Gyu-chan
Original: https://www.epnc.co.kr/news/articleView.html?idxno=407636

References

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