- Kioxia plans an October IPO on the Tokyo Stock Exchange with a valuation over 1.5 trillion yen, driven by rising AI demand.
- If Kioxia’s valuation exceeds 1.5 trillion yen, it will surpass Kokusai Electric’s 2023 IPO and exceed Tokyo Metro’s expected 640-700 billion yen listing.
OUR TAKE
Kioxia’s IPO is a major event in the Japanese financial markets and the tech sector. Its success could signal robust investor confidence in semiconductor companies and reflect broader trends in the tech industry, particularly the growing influence of AI on demand for memory technology.The company is enhancing its financing options, which had previously relied on borrowing, as demand for AI data centers expands and competition for investment heats up.
-Tacy Ding, BTW reporter.
What happened
Japanese chipmaker Kioxia Holdings has applied to list on the Tokyo Stock Exchange, aiming for an October debut. This move comes as demand for semiconductors, driven by the AI sector, continues to surge.
Kioxia is projected to achieve a market capitalisation exceeding 1.5 trillion yen ($10.3 billion), potentially making it the largest initial public offering (IPO) on the Tokyo Stock Exchange this year. The company plans to use the funds from the IPO to address the growing need for memory chips fueled by the AI boom.
The world’s third-largest manufacturer of NAND flash memory used for data storage, Kioxia became independent from Japanese conglomerate Toshiba in 2018 and took on its current name the following year. It is 56%-owned by a special-purpose company formed by private equity giant Bain Capital and SK Hynix, a South Korean memory producer. Toshiba holds a 41% stake.
Sources indicate that both Bain and Toshiba intend to gradually reduce their stakes after Kioxia’s listing.
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Why it’s important
If Kioxia’s valuation exceeds 1.5 trillion yen at its listing, it would surpass the 420 billion yen valuation achieved by chip equipment maker Kokusai Electric in its 2023 IPO, which was the largest IPO of that year. Additionally, Kioxia’s valuation would be greater than the anticipated listing of Tokyo Metro in October, which is projected to range between 640 billion and 700 billion yen.
The Kioxia deal is poised to be the largest since SoftBank, the domestic telecom unit of SoftBank Group, went public in 2018 with a market capitalisation of 7.18 trillion yen.
Kioxia had initially been approved to list on the Tokyo Stock Exchange in 2020, but the plan was delayed due to escalating U.S.-China trade tensions that overshadowed the markets.
With the business environment now improving, Kioxia has renewed its push to go public. The company’s net profit for the April to June quarter reached a record high of 69.8 billion yen, driven by a recovery in demand for smartphones and PCs, key markets for memory chips.
