SK Hynix shares fell as much as 3% in Seoul after the South Korean chipmaker halted its review of a potential US initial public offering for subsidiary Solidigm.
The company pointed to increased financial market volatility and regulatory scrutiny at home as it weighs other ways to finance expansion for AI memory demand.
Solidigm stopped evaluating pre-IPO fundraising and listing options after assessing capital market conditions and share price trends.
SK Hynix said the subsidiary's investment requirements remain unchanged and that it will keep examining alternative financing methods to support growth and shareholder value.
Why the listing review was dropped
An IPO had been seen as a route to fund Solidigm's expansion while giving more flexibility for shareholder returns such as dividends, buybacks and share cancellations.
Market swings and a broader correction in semiconductor stocks led the company to reassess how much existing shareholders would actually gain from a listing.
SK Hynix also cited rising AI memory demand and limited capacity at Solidigm's current production facilities.
The company has been exploring funding options to support a new semiconductor fabrication plant in the United States.
In its statement, SK Hynix said Solidigm will halt its review of potential pre-IPO and IPO options.
The decision followed scrutiny from South Korean financial regulators over whether a US listing would comply with restrictions on dual listings.
Financial Supervisory Service Governor Lee Chan-jin said regulators were examining whether the proposed IPO would require a review under rules meant to protect minority shareholders.
Weakness in US technology stocks added to the pressure, with the Nasdaq Composite falling 2.6% on Thursday, its steepest single-session drop since June.
Nvidia shares fell 4.4% and Advanced Micro Devices dropped 8.1%.
Nvidia CEO Jensen Huang told CNBC he did not expect an oversupply of memory chips by 2029 despite concerns about weakening demand.
AI data center companies also came under pressure as investors weighed financing risks and the pace of infrastructure expansion.
CoreWeave shares plunged 10%, extending their monthly decline to 36%, while Australia's NextDC fell nearly 40% after cutting its earnings forecast.
