SK Hynix CEO Says Chipmaker Is Weighing Closer Ties With Kioxia

SK Hynix Inc. is exploring ways to deepen its cooperation with Japanese flash memory producer Kioxia Holdings Corp., in which the South Korean chipmaker has a significant indirect stake, Chief Executive Officer Kwak Noh-Jung said.

“We don’t have any fixed plans” for the company’s stake in Kioxia, Kwak told reporters Thursday after a groundbreaking ceremony for a new US plant in West Lafayette, Indiana. “But we are very carefully looking at how we can co-develop the NAND flash market for our customers and suppliers.”

SK Hynix, the world’s second-biggest memory maker, is also keen to contribute to the development of Japan’s semiconductor industry, much as it aims to do in Indiana, where it’s investing more than $4 billion, Kwak said. “It is our responsibility,” he added.

Kioxia specializes in NAND flash memory, a type of storage that preserves data even when the power is switched off.

Read More: SK Hynix Starts Construction of $4 Billion Memory Hub in Indiana

The Tokyo-based company’s shareholder structure shifted recently after former parent Toshiba Corp. reduced its stake to about 14.12% from 14.48% as of Aug. 3, according to Kioxia’s statement earlier this month. That made BCPE Pangea Cayman2, an investment vehicle set up by Bain Capital, Kioxia’s largest shareholder with a 14.19% stake.

SK Hynix holds bonds that can be converted into “substantially all” of the voting rights of BCPE Pangea Cayman2, according to Kioxia’s annual report. Kioxia identifies SK Hynix’s interest as a risk factor in the report, citing the potential for conflicts of interest.

SK Hynix was part of the Bain Capital-led consortium that acquired Kioxia from Toshiba in 2018. Under the terms of that investment, SK Hynix agreed to keep its voting interest in Kioxia at 15% or less until 2028 unless the Japanese chipmaker consents to a larger stake.

Read More: Kioxia Says Investment Vehicle for SK Hynix Is Top Shareholder

Asked whether SK Hynix could expand its investments in the US, Kwak declined to provide details. He said the company remains open to investing in locations that can provide reliable access to power, water and skilled workers. “We are open to everywhere, but still, nothing is decided,” he said.

Kwak also said SK Hynix continues to review the possibility of listing its US NAND subsidiary, Solidigm. Earlier this month, SK Hynix said Solidigm was considering “various measures to strengthen its competitiveness” after South Korean media reported that the company was pursuing a pre-initial public offering fundraising of between 5 trillion won ($3.6 billion) and 10 trillion won.

SK Hynix said at the time that no decision had been made and that it would make another disclosure once details were confirmed or within one month.