Solidigm, Former Intel NAND Unit, Eyes $150B IPO with $1.5T Valuation

Article | New Quality Productive Forces

Intel's castoff races to become the largest semiconductor IPO in U.S. history.

Recently, according to Reuters, Solidigm, a U.S. subsidiary of SK Hynix, has held underwriter bidding meetings with multiple investment banks, planning an initial public offering as early as next year, with a target fundraising amount of approximately $15 billion and a maximum valuation of up to $150 billion, equivalent to about 1 trillion RMB.

If this valuation is successfully realized, Solidigm could set the record for the largest IPO in U.S. semiconductor history.

Surprisingly, Solidigm, which is now gaining significant attention, was formerly Intel’s NAND flash memory and SSD business. In 2020, Intel sold this business to South Korea’s SK Hynix for approximately $9 billion, giving rise to Solidigm.

This transaction, once regarded by Intel as a painful but necessary move, has now brought immense profits to SK Hynix. Based on a potential valuation of $150 billion, the acquisition has generated a paper return of nearly 17 times.

From being sold at a 60-billion-yuan discount by Intel to now pursuing a trillion-dollar valuation, what has Solidigm truly experienced through this dramatic turnaround?

Recently, according to Reuters, Solidigm has officially initiated the selection of underwriters for its IPO. SK Hynix stated that Solidigm is evaluating various options to enhance its competitiveness, but no specific plans have been confirmed yet.

Even so, a potential valuation of $150 billion is still quite remarkable.

Reviewing recent IPO records of major semiconductor companies: In 2023, the chip design firm Arm went public with an valuation of approximately $54 billion, raising $4.87 billion; in 2026, the AI chip company Cerebras completed its IPO, with a fully diluted valuation of approximately $56.4 billion based on the offering price, raising around $6.38 billion.

If Solidigm completes its IPO at a $150 billion valuation, its valuation would be approximately 2.7 times that of both; the $15 billion fundraising amount would also significantly exceed both of these transactions.

But rewind six years, and Solidigm’s story wasn’t so glamorous.

In October 2020, Intel announced the sale of its NAND flash and storage business to SK Hynitz for a total consideration of approximately $9 billion, equivalent to about RMB 60 billion. At the time, Intel aimed to concentrate its resources on more strategically prioritized businesses, while SK Hynix sought to expand its market share in NAND flash and complete its storage product portfolio.

This transaction did not immediately benefit SK Hynix. Shortly after the acquisition, Solidigm encountered a downturn in the storage industry.

From the second half of 2022 to the first half of 2024, chip prices continued to decline, compounded by the company’s need to complete production line calibration and customer certifications; as a result, Solidigm sustained significant losses, becoming a "money printer."

Financial data shows that Solidigm incurred losses of approximately KRW 3.3 trillion in 2022 and KRW 4 trillion in 2023, resulting in cumulative losses exceeding KRW 7 trillion over the two years, equivalent to approximately RMB 37 billion. As of the end of 2023, Solidigm’s shareholders’ equity turned negative at KRW 906 billion, and its debt-to-asset ratio reached as high as 4,484.6% in 2024.

Under immense debt pressure, Solidigm chose to streamline operations in October 2024 by discontinuing its consumer business, halting production of consumer SSD products such as the P44 Pro and P41 Plus, and removing the consumer SSD product portal in January 2025, fully focusing on the enterprise market.

But no one anticipated that this difficult self-rescue would coincide with a window of explosive growth in AI infrastructure, bringing a major turning point to the business.

The core of its trillion-dollar valuation is Solidigm's outstanding performance.

SK Hynix's financial report shows that, as of the end of June 2026, Solidigm's revenue for the first half of this year reached KRW 1.225 trillion, a substantial increase of 265% year-over-year; its net profit amounted to KRW 583.9 billion, surging 44-fold compared to the low base of the same period last year.

Profitability has achieved a qualitative leap: Solidigm’s net profit margin surged from 3.9% in the first half of 2025 to 47.7% in the first half of 2026, marking the first time in its history that cumulative earnings turned profitable.

In the semiconductor hardware industry, most hardware manufacturers maintain net profit margins consistently in the 20% to 30% range, while the current industry leader, NVIDIA, has a net profit margin of approximately 55%. As a company specializing in high-capacity enterprise SSDs, Solidigm’s net profit margin of nearly 48% far exceeds that of the vast majority of its hardware peers and is approaching NVIDIA’s level.

The underlying logic behind the surge in performance stems from a transformation in storage demand driven by the evolution of the AI industry: AI has fully transitioned from the early era of model training to the era of inference deployment.

Counterpoint Research data shows that in the second quarter of 2026, enterprise SSDs (eSSDs) accounted for 48% of global NAND flash shipments, with AI inference demand officially surpassing model training as the primary driver of growth in the storage market.

In everyday AI inference interactions, the model frequently accesses 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 heavily consume memory resources. However, traditional DRAM and HBM are expensive and have limited capacity, making them inadequate to meet the demands of large-scale AI caching.

This industry commonly adopts an external KV Cache solution, using high-capacity, high-speed enterprise-grade SSDs to store cached data, significantly reducing AI operational costs through “storage-for-computation” optimization.

This technological upgrade has completely transformed the value proposition of SSDs. Enterprise SSDs are no longer merely storage repositories for data; they have become essential hardware for expanding main memory, actively participating in real-time AI computations and serving as critical temporary caches, making them indispensable for AI computing power.

Solidigm has precisely capitalized on the benefits of this technological trajectory. Its flagship product, the D5-P5336, features a 3D QLC architecture with a maximum capacity of 122.88 TB per drive, offering low storage costs. In data center NAS scenarios, it reduces energy consumption by up to 84% compared to traditional HDD and TLC solutions.

Driven by this momentum, global markets have seen a frenzy of rising volumes and prices: In the second quarter of 2026, enterprise-grade NAND contract prices surged by 70% to 75% quarter-over-quarter; the unit price of Solidigm’s flagship 122TB product rose from $12,399 in the second half of 2025 to $37,128, nearly tripling in just nine months, with the average price per TB increasing from $101 to $302.

Global cloud service and AI computing giants, including CoreWeave, Vast Data, Dell, and Tencent, have all joined Solidigm’s customer list. In August 2026, AI computing cloud leader CoreWeave signed a multi-year strategic agreement with Solidigm, securing priority access to high-capacity enterprise SSDs.

Just as tech giants rushed to secure GPU and HBM capacity two years ago, enterprise SSDs have now entered the era of advance capacity pre-orders.

Driven by product and market growth, SK Hynix recorded an operating profit of KRW 6.054 trillion in the second quarter of 2026, a remarkable 557% year-over-year increase, with an operating margin exceeding 76%. For the first half of the year, the company’s total revenue surpassed KRW 100 trillion, and it held approximately 21.1% of the global enterprise SSD market, firmly ranking among the industry’s leaders.

Seeing Solidigm’s current valuation of $150 billion and billions in cash flow, many industry observers can’t help but joke: Intel’s shareholders must be kicking themselves.

But looking 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 operational challenges and financial pressures at the time.

Even during the construction and operation phase of the Dalian factory, the storage chip industry was characterized by high capital expenditures, strong cyclicality, and low profit margins. Unlike CPUs with strong pricing power, NAND flash memory is a standardized commodity, and competition in the industry is extremely intense.

Before 2020, the global storage market was dominated by six major manufacturers: Samsung, Kioxia, Western Digital, Micron, SK Hynix, and Intel. Intel’s NAND business held only about 11% of the global market share, ranking last among the six manufacturers.

From a financial performance perspective, Intel’s Non-Volatile Memory Solutions Group (NSG) incurred losses of $540 million, $260 million, and $5 million in 2016, 2017, and 2018, respectively; over the trailing 12 months through the second quarter of 2020, the business accumulated a total loss of $340 million.

Faced with declining storage cycles and sustained high R&D investment, Intel’s management has decided to divest non-core assets and concentrate resources on high-margin CPUs, as well as AI and edge computing initiatives, choosing to monetize its NAND manufacturing and SSD businesses.

This acquisition ultimately became a classic case in semiconductor merger history. SK Hynix gained control of Intel’s Dalian facility’s production capacity, along with Intel’s years of accumulated NAND intellectual property and core R&D team.

Despite the initial pain of integrating two competing technologies and sustaining a massive loss of 37 billion yuan between 2022 and 2023, SK Hynix decisively cut its losses by replacing management and divesting its consumer business, transforming what was once a "hot potato" into a "golden asset."

As Solidigm moves toward its IPO, SK Hynesis’s initial $9 billion investment has grown to a potential valuation of $150 billion, yielding a paper return of nearly 17 times. More importantly, Solidigm’s enterprise SSDs strategically complement SK Hynesis’s own HBM and DRAM products, completing the storage component of AI computing infrastructure.

SK Hynix and Solidigm reaped the AI storage benefits that Intel once missed.

Reference article:

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Racing to become the largest semiconductor IPO in U.S. history! Solidigm, once sold by Intel for $9 billion, is now valued at up to $150 billion, Wall Street Journal;

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