SK Hynix to spin Solidigm into new US AI investment vehicle

SK Hynix is looking to restructure Solidigm, its acquired Intel NAND fab and SSD business, and invest in AI-related US businesses to strengthen the role of its memory products in the systems and products they produce.

It is setting up an AI Co. in the US as it looks to grow its business there. AI Co., a temporary name, will be the new California-based operating entity replacing Solidigm. The existing Solidigm NAND and SSD operations will move to a new subsidiary, to be called Solidigm Inc, “to ensure brand continuity.”

SK Hynix stated: “Leveraging its unparalleled chip technologies, such as HBM, the memory chipmaker will try to play a pivotal role in delivering optimized AI systems for its customers in the AI datacenter sector. The company will also continue making strategic investments in, and collaborating with, AI firms to strengthen its competitiveness in memory chips and provide a range of AI datacenter solutions.”

SK Hynix will commit $10 billion to AI Co., with the funds to be deployed on a capital-call basis.

In line with its AI strategy, SK Hynix is considering investing in innovative companies in the US and partnering with them through AI Co. to create synergy with the SK Group affiliates. It wants to move up the AI product stack from its DRAM, HBM, and NAND chips/SSD base to get more of its chips and SSDs used in products.

We would think it likely that AI Co. will invest in US memory systems and system software businesses with an AI focus. The aim will be to get them to use SK Hynix memory and NAND/SSD products, including high-bandwidth memory (HBM) and possibly high-bandwidth flash (HBF) if that technology becomes viable, in the products they build and support.

SK Hynix said: “The planned establishment of AI Co. is aimed at securing opportunities in the emerging AI era. The company will continue to work closely with global partners while proactively creating value for customers.”

We think AI Co. will receive its proper name in the next few weeks. Samsung tried setting up a US flash storage array product operation called Stellus in 2018-2019, but by 2021 it had been wound down.

Bootnote

We hear from Solidigm that it is “providing the anchor asset of this new $10 billion investment and will play into the AI infrastructure solutions they’ll provide.”