SK Hynix's Solidigm weighs IPO that could value the unit at up to $150 billion, sources say

By Milana Vinn and Echo Wang

NEW YORK, Sept 25 (Reuters) - Chipmaker SK Hynix's 000660.KS Solidigm is considering an initial public offering as early as next year that could value the US subsidiary at up to $150 billion, according to three people familiar with the matter.

Solidigm held pitch meetings this week with investment banks competing for roles on the IPO, in a process known as a "bake-off," one of the people and a fourth person said, marking a concrete step toward what could become the largest-ever US semiconductor listing.

The company could raise $15 billion in the IPO, the three people said, speaking on condition of anonymity to discuss confidential matters. The plans, including the size of deal and timing, remain at an early stage and could change depending on market conditions, they added.

The listing would rank as one of the largest semiconductor IPOs on record and could provide a standalone valuation for a business that has become a key part of SK Hynix's storage portfolio. It would also seek to tap strong investor demand for companies tied to artificial intelligence infrastructure, which has fuelled gains in semiconductor and hardware stocks.

Solidigm, based in Rancho Cordova, California, is the US-based NAND flash memory and solid-state drive (SSD) subsidiary of South Korea's SK Hynix Inc.

Solidigm declined to comment. SK Hynix did not immediately respond to a request for comment.

BOOSTING COMPETITIVENESS

SK Hynix acquired Intel Corp's INTC.O NAND memory and SSD business for about $9 billion in a deal announced in 2020, combining those operations with Solidigm, which was launched as a standalone subsidiary in 2021. At the time, the company said the acquisition would strengthen its NAND flash and enterprise SSD businesses and expand its position in the global memory market.

Solidigm supplies enterprise SSDs used in servers, cloud infrastructure and data centers. The company has sought to differentiate itself through high-capacity storage products designed for AI applications, where growing volumes of data require increasingly sophisticated storage solutions.

Reuters reported earlier this month that Solidigm is considering building a NAND flash memory chip factory in the US, with upstate New York emerging as a leading candidate, as part of efforts to expand manufacturing capacity.

Last month, SK Hynix said it was considering measures to boost Solidigm's competitiveness after media reports that the unit was exploring a pre-IPO fundraising round of about 5 trillion won ($3.6 billion).

A valuation of up to $150 billion would far exceed recent semiconductor IPOs, including Arm Holdings' O9Ty.F roughly $54 billion valuation at its 2023 debut and Cerebras Systems' CBRS.O approximately $56 billion fully diluted valuation in its 2026 IPO.