South Korea’s SK Hynix has decided to scrap a planned Nasdaq IPO for its US NAND memory subsidiary Solidigm, following intense resistance from its own shareholders, the newspaper reported.

The decision means a pre-IPO funding round will also be terminated, the paper reported, citing unnamed sources.

SK Hynix had reviewed its options for Solidigm for several weeks amid opposition to the flotation from its own investors.

Investor fears

Investors had argued that the listing would amount to a dual listing, with new shares in Solidigm effectively diluting the value of their existing stakes and handing future profit from the unit to new investors.

The Rancho Cordova, California-based unit was created when SK Hynix acquired Intel’s NAND flash memory business in 2021, and is managed under AI Company, a US holding company set up in January that wholly owns Solidigm.

AI Company posted a net profit of 5.84 trillion won ($440.6bn) in the first half of the year, amounting to 4.3 percent of SK Hynix’s total profit, with its revenue accounting to 9.3 percent of the parent company’s total, according to the report.

Sagging stocks

SK Hynix has seen its shares decline sharply since highs in June, along with those of a number of other tech firms that have benefited from the AI infrastructure boom, with shares dropping one-third in the past month alone – a trend that the report cited as contributing to the decision to rethink the Solidigm listing.

The company previously said it was reviewing options for strengthening Solidigm’s competitiveness, but hadn’t made any final decisions.