Solidigm, a subsidiary of SK hynix, is preparing an IPO, which the report describes as the largest semiconductor IPO.
*Byline: Xinzhi Dongneng (新质动能). Republished with authorization from TMTPost.*
Intel has discarded the unit, and it is now heading for the largest semiconductor IPO on a U.S. exchange.
According to Reuters, Solidigm, the U.S. subsidiary of SK hynix, has held underwriter selection meetings with several investment banks and plans to list as early as next year. The offering targets about $15 billion in proceeds at a valuation of up to $150 billion, roughly 1 trillion yuan. If that valuation holds, Solidigm would set a record for the largest semiconductor IPO in U.S. stock market history.
Surprisingly, Solidigm, now the subject of intense interest, traces its origins to a business Intel once sold: its NAND flash memory and solid-state drive (SSD) operations. In 2020, Intel sold this business to South Korea's SK hynix for about $9 billion, and Solidigm was born from that deal.
Intel viewed the transaction at the time as a painful, last-resort decision. Today, it has made SK hynix a fortune. At the potential $150 billion valuation, the acquisition's book return would be close to 17 times the purchase price.
How did Solidigm go from being sold at a discount for about 60 billion yuan to approaching a trillion-yuan valuation? What happened in between?
**From Intel's "Discarded Asset" to the Largest Semiconductor IPO**
Reuters reports that Solidigm has formally begun selecting underwriters for its IPO. SK hynix said Solidigm is evaluating various measures to improve its competitiveness and has not confirmed a specific plan.
Even so, the potential $150 billion valuation is striking.
Looking at recent landmark semiconductor listings, Arm went public in 2023 at a valuation of about $54 billion and raised $4.87 billion. In 2026, AI chip company Cerebras completed its IPO at a fully diluted valuation of about $56.4 billion based on the offering price, raising about $6.38 billion.
If Solidigm ultimately lists at a $150 billion valuation, that would be about 2.7 times the valuations of those two deals. Its $15 billion fundraising target would also far exceed both.
Six years ago, however, Solidigm's story was far less glamorous.
In October 2020, Intel announced it would sell its NAND flash and storage business to SK hynix for a total consideration of about $9 billion, or roughly 60 billion yuan. At the time, Intel wanted to concentrate its resources on more strategically important businesses, while SK hynix hoped to expand its share of the NAND flash market and fill gaps in its storage product lineup.
The deal did not bring SK hynix immediate rewards. After the acquisition closed, Solidigm quickly ran into a downturn in the memory industry.
From the second half of 2022 through the first half of 2024, chip prices kept falling. Combined with the need to complete production line commissioning and customer qualification, Solidigm posted large and sustained losses, becoming a "cash incinerator."
Financial data show Solidigm lost about 3.3 trillion won in 2022 and 4 trillion won in 2023, more than 7 trillion won in total over two years, or roughly 37 billion yuan. At the end of 2023, Solidigm's shareholders' equity turned negative at 906 billion won, and its debt-to-asset ratio reached as high as 4,484.6% in 2024.
Under this heavy debt burden, Solidigm chose to cut its losses to survive in October 2024. It exited the consumer business, discontinued consumer SSD products such as the P44 Pro and P41 Plus, and in January 2025 removed consumer SSDs from its product lineup, focusing entirely on the enterprise market.
No one expected that this difficult self-rescue would coincide with the explosive growth of AI infrastructure, which brought a major turnaround in the business.
**AI Drives a Surge in Storage Demand**
The core driver behind the trillion-yuan valuation is Solidigm's strong financial performance.
According to financial results disclosed by SK hynix, as of the end of June 2026, Solidigm's revenue for the first half of this year was 12.25 trillion won, up 265% year on year. Net profit was 5.839 trillion won, up 44 times from the same period last year, off a very low base.
Profitability has improved qualitatively. Solidigm's net profit margin rose from 3.9% in the first half of 2025 to 47.7% in the first half of 2026, and it recorded its first cumulative profit turnaround in its history.
In the semiconductor hardware industry, most manufacturers have net margins that typically stay in the 20% to 30% range, and industry leader Nvidia's net margin is about 55%. As a company focused on high-capacity enterprise SSDs, Solidigm's margin of nearly 48% far exceeds most of its hardware peers and approaches Nvidia's level.
The underlying logic of this earnings surge stems from changes in storage demand driven by the evolution of the AI industry. The AI sector has moved from the early era of model training to a full-scale phase of inference deployment.
Data from Counterpoint Research show that in the second quarter of 2026, enterprise SSDs (eSSDs) accounted for 48% of global NAND flash shipments. AI inference demand has formally replaced model training as the core driver of storage market growth.
In everyday AI inference, models must frequently retrieve massive amounts of data to respond to user queries. A single query can generate tens of thousands of tokens, producing large volumes of KV cache data that consume memory heavily. Traditional DRAM and HBM are expensive and limited in capacity, making them ill-suited to handling large-scale AI caching needs.
To address this, the industry has widely adopted externalized KV cache solutions, using high-capacity, high-speed enterprise SSDs to hold cache data and substantially reducing AI operating costs by "trading storage for computation."
This technological shift has fundamentally changed the value proposition of SSDs. Enterprise SSDs are no longer simply warehouses for data. They now participate in real-time AI computation and hold temporary cache data, functioning as core memory-expansion hardware and becoming an essential device for AI computing power.
Solidigm has ridden this technology trend. Its flagship product, the D5-P5336, uses a 3D QLC architecture with a maximum single-drive capacity of 122.88 TB. It offers low storage costs and, in data center NAS scenarios, can reduce energy consumption by up to 84% compared with traditional HDD and TLC solutions.
Driven by these trends, the global market has entered a frenzy of "rising volumes and rising prices." In the second quarter of 2026, enterprise NAND contract prices rose 70% to 75% quarter on quarter. The unit price of Solidigm's flagship 122 TB product increased from $12,399 in the second half of 2025 to $37,128, nearly tripling in nine months. The average price per TB rose from $101 to $302.
Global cloud service and AI computing giants, including CoreWeave, Vast Data, Dell, and Tencent, have joined Solidigm's customer list. In August 2026, CoreWeave, a leading AI computing cloud provider, signed a multi-year strategic agreement with Solidigm to secure priority supply of high-capacity enterprise SSDs in advance.
Just as technology giants competed to buy GPUs and HBM in previous years, enterprise SSDs have now entered an era of advance capacity reservations.
Driven by the explosive growth of its products and markets, the SK hynix group posted an operating profit of 60.54 trillion won in the second quarter of 2026, up 557% year on year, with an operating margin above 76%. Group-wide sales for the first half of the year surpassed the 100 trillion won mark for the first time. The company holds about 21.1% of the global enterprise SSD market, ranking among the industry's top players.
**Why Did Intel Sell Solidigm?**
Looking at Solidigm's current $150 billion potential valuation and its multibillion-dollar cash flows, some industry observers have joked that Intel's shareholders must be kicking themselves.
But if we look back at the industry environment in 2020, Intel's decision to divest its NAND flash and SSD business for $9 billion was a rational choice driven by the business's pain points and financial pressures at the time.
Even during the construction and operation of its Dalian factory, the memory chip industry was characterized by high capital expenditure, strong cyclicality, and low gross margins. Unlike CPUs, which carry strong pricing power, NAND flash is a standardized commodity, and competition in the industry is extremely fierce.
Before 2020, the global memory market was divided among six major manufacturers: Samsung, Kioxia, Western Digital, Micron, SK hynix, and Intel. Intel's NAND business held only about 11% of global market share, ranking last among the six.
From a financial standpoint, Intel's Non-Volatile Memory Solutions Group (NSG) posted losses of $540 million in 2016, $260 million in 2017, and $5 million in 2018. For the 12 months ending in the second quarter of 2020, the business had accumulated losses of $340 million.
Faced with a downturn in the storage cycle and ongoing heavy R&D investment, Intel's management decided to shed non-core assets, concentrate resources on high-margin CPUs and on AI and edge computing, and monetize its NAND manufacturing and SSD operations.
The deal ultimately became a classic case in semiconductor M&A history. SK hynix acquired Intel's Dalian factory capacity, along with Intel's accumulated NAND intellectual property and core R&D team.
Despite the pain of integrating two technology paths in the early stages of the acquisition, and despite the massive losses of about 37 billion yuan in 2022 and 2023, SK hynix changed management, exited the consumer business to stop the bleeding decisively, and turned what had been a "hot potato" into a "golden nugget."
As Solidigm moves toward its IPO, SK hynix's $9 billion investment corresponds to a potential valuation of $150 billion today, implying a book return of nearly 17 times. More importantly, Solidigm's enterprise SSDs can complement SK hynix's own HBM and DRAM products, filling out the storage portfolio for AI computing infrastructure.
The AI storage dividend that Intel did not live to see has been captured by SK hynix and Solidigm.
**References**
- "Valuation Tops 1 Trillion Yuan! The Largest Semiconductor IPO in U.S. History May Be Coming, After Being Sold by Intel for 60 Billion Yuan," 21st Century Business Herald
- "Racing Toward the Largest Semiconductor IPO in U.S. History! Solidigm, Once Sold by Intel for $9 Billion, May Now Be Valued at $150 Billion," Wall Street Insight
- "The Largest Semiconductor IPO Is Coming," Zero2IPO
- "Zhichao Observations | The 'Hot Potato' Intel Sold for 60 Billion Yuan Is Now Valued at 1 Trillion Yuan in an IPO," Qianjiang Evening News
- "Memory Chip Landscape Shifts: SK hynix Takes Over Intel's Flash Business, Korean Manufacturers Claim Half the Market," 21st Century Business Herald
- "Chip Industry Rocked Again: Intel Plans to Sell NAND Flash Business for $9 Billion," China Securities Journal
- "Global Memory Chip Market Shifts: SK hynix Acquires Intel's Flash Business for $9 Billion," China Business Journal
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