SK Hynix's $38 Billion Bet: New Fabs, a Solidigm IPO Question, and a Balance Sheet That Keeps Growing
Published on 08/17/2026 at 17:41 | Redaktion boerse-global.de
The memory chip maker's board has signed off on a record capital spending plan, but the debate swirling around a potential Nasdaq listing for its US subsidiary is proving just as consequential for the stock.
SK Hynix approved investments totaling 54.3 trillion won (roughly $38 billion) on Monday, channeling the bulk of that firepower into two new fabrication facilities in South Korea. The larger tranche, 35.2 trillion won, is earmarked for the "Y2" plant in Yongin, where the company will produce next-generation High Bandwidth Memory and DRAM. Groundbreaking is scheduled for July 2027, with the first cleanroom opening in June 2029. The second site, "M17" in Cheongju, receives 19.1 trillion won for NAND flash production, with construction starting in February 2027 and the cleanroom completed by the end of 2028. Together, the two sites are designed to secure the supply chain for hyperscalers and AI data center operators through at least 2031.
US-listed shares of SK Hynix responded with a gain of as much as 3.84%, approaching the $173 mark. The move came amid a flurry of supporting developments: Singapore's sovereign wealth fund Temasek is reportedly weighing larger investments in both SK Hynix and Samsung Electronics to capitalize on the AI memory boom, and the company has resumed construction on its second NAND fab in Dalian, China, with local output expected to rise roughly 50% by the first half of 2027.
Nvidia's Outsize Footprint
The company's semi-annual report, published August 14, underscores just how concentrated its customer base has become. A single major client contributed 17.61 trillion won in the first half — 13.35% of total revenue. While the report doesn't name the customer, industry observers universally attribute the figure to Nvidia, reflecting how deeply SK Hynix's memory chips are now embedded in the leading AI chip designer's ecosystem.
The regional breakdown tells a similar story. The US accounted for 84.56 trillion won in first-half revenue, or 64.1% of the total, driven by data center demand for HBM4E memory and enterprise SSDs. Beyond Nvidia, the company is increasingly supplying HBM for the Vera Rubin platform and other tech firms developing specialized AI chips.
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The Solidigm Question
The investment announcement lands against the backdrop of a contentious debate over a potential IPO of Solidigm, SK Hynix's US-based NAND subsidiary. Media reports suggest a pre-IPO valuation of around 50 trillion won is being discussed, with the potential to raise up to 10 trillion won. A Nasdaq listing is on the table.
Korean analysts are split on the merits. Toss Securities, through market strategist Lee Young-gon, warns of economic dilution for existing SK Hynix shareholders. Mirae Asset's Kim Young-gun takes a more favorable view, arguing a listing could free up as much as $15 billion in additional investment capacity. The Korea Corporate Governance Forum has criticized the plan as a form of five-fold layered multiple listing and is calling for it to be scrapped.
The stock's volatility around the IPO chatter has been pronounced. On August 6, shares plunged 10.37% after a denial circulated regarding the rumors. More recently, the stock gained 3.3% on Friday to 1,645,000 won, bringing its seven-day advance to 16%. Year-to-date, the shares are up 153%, though they remain 45% below the 52-week high of 2,987,000 won set in June. The annualized 30-day volatility of 139% reflects how nervously the market is processing the conflicting signals.
A Balance Sheet With Room to Run
Setting aside the IPO debate, the interim results paint a picture of growing financial firepower. Together with Samsung Electronics, SK Hynix expanded its cash position by 117 trillion won in the first half of 2026, reaching a combined 277.91 trillion won. SK Hynix alone holds 87.96 trillion won, up 53 trillion won from the end of 2025. Debt fell by 3.66 trillion won to 18.59 trillion won, while net cash climbed to 69.37 trillion won — against a stated target of 100 trillion won.
First-half operating profit came in at 98.15 trillion won. For the third quarter, observers expect combined operating profit with Samsung of around 200 trillion won. KB Securities calls SK Hynix "extremely undervalued," projecting a price-to-earnings ratio of just 3.2 for 2027, based on a combined expected operating profit of 964 trillion won for SK Hynix and Samsung that year.
For the third quarter of 2026, analysts forecast operating profit of 77 trillion won, a 579% jump from the prior-year period. More than 60% of memory production is already locked in under five-year contracts, providing a buffer against price swings. JPMorgan notes that demand is running stronger than expected just three months ago, with price increases spreading across equipment and materials. SK Hynix itself has raised its 2026 capital expenditure budget by 45% to 40 trillion won.
The stock currently trades at roughly six times expected forward earnings, a multiple that balances the enormous revenue growth — 257% in the second quarter — against the multi-year construction timelines of the new fabs. The Yongin and Cheongju facilities won't come online until 2028 and 2029 at the earliest. Until then, Nvidia remains the dominant growth engine, and the Solidigm question continues to hang over the shares.
