Kioxia’s IPO Set for December: $4.8 Billion Tokyo Stock Exchange Debut

(Bloomberg) — Kioxia Holdings Corp. is gearing up for a significant move as it plans to make its debut on the Tokyo Stock Exchange in mid-December, aiming for a valuation of approximately ¥750 billion ($4.8 billion). This strategic listing is part of the company’s efforts to remain competitive in the fiercely contested memory chip market.

Insiders have indicated that the Tokyo bourse is expected to greenlight the Bain-backed chipmaker’s initial public offering (IPO) as soon as Friday. The indicative price of the offering, which was initially reported by Reuters, is tentative and subject to fluctuations based on market demand, according to a source who wished to remain anonymous due to the confidential nature of the information.

The forthcoming listing benefits from a newly instituted structure designed to accelerate the IPO process, making it easier for companies like Kioxia to enter the public market.

This long-awaited IPO comes at a crucial time for Kioxia, as the competitive landscape continues to evolve and the technological divide between the company and market leader Samsung Electronics Co. is widening. A successful market debut would provide Kioxia, currently the No.3 player in the NAND flash memory space, with essential capital to enhance its production capacity and take advantage of a projected recovery in chip prices.

According to data compiled by Bloomberg, shareholder Bain Capital maintains a 56% stake in the company, while Toshiba Corp. holds a 41% interest and Hoya Corp. possesses 3% of Kioxia’s shares.

Since being spun off from Toshiba in 2018, Kioxia has focused heavily on a specific type of memory technology, which renders it more susceptible to market fluctuations compared to its rivals, Samsung and SK Hynix Inc. Following the decision to shelve an earlier IPO plan in October 2020, Kioxia has endured a challenging period marked by a significant downturn in NAND prices, affecting its investment capabilities and hindering its ability to diversify its product offerings. Recently, the firm came out of a taxing stretch characterized by six consecutive quarters of operating losses.

Earlier this year, Kioxia aimed for an IPO in October, but that plan was postponed. The company informed sources that it was then targeting a debut sometime between this December and June of the following year, as reported by Bloomberg.

⁢ What factors‍ have contributed to Kioxia’s decision‍ to pursue⁢ an IPO at⁢ this time, and how might it impact their market position?

**Interview with Financial Expert John Tanaka ⁢about Kioxia’s IPO ​Plans**

**Editor:** Thank you for joining us today, John. Kioxia Holdings Corp. is set to​ debut on the Tokyo Stock Exchange ​in mid-December. What do you ⁣think about ⁣their goal‌ of achieving a valuation of approximately ¥750 billion?

**John‍ Tanaka:** Thank you for having me.​ Kioxia’s valuation target⁣ of ¥750 ​billion, or about‌ $4.8 billion, is ambitious yet⁣ realistic, given the strong demand​ for memory chips globally. Their IPO signifies a ‍crucial step for them to enhance competitiveness in a rapidly evolving market where ‍technological advancements play a pivotal role.

**Editor:** Indeed, the memory chip market ⁣is fiercely competitive. Can you elaborate on⁣ why ⁢Kioxia feels this IPO is necessary at this juncture?

**John Tanaka:** Absolutely.‌ With the surge in demand for data storage solutions for everything from consumer electronics to cloud computing, Kioxia needs ‌the capital generated from ⁤this IPO to invest in research⁣ and ‍development and expand its production capabilities. Staying ahead ​of competitors like‍ Samsung and Micron is vital, especially as technology ⁤shifts towards ‍higher-capacity storage options.

**Editor:** We’ve heard that the Tokyo Stock Exchange⁢ is expected to greenlight ‍Kioxia’s IPO shortly. What do you think this means for investor confidence?

**John Tanaka:**⁤ The swift ⁤approval by the ⁢Tokyo bourse indicates a strong belief in Kioxia’s business model⁣ and growth potential. It also reflects a broader ‍market optimism as investors are looking for ‌opportunities in tech and semiconductor sectors, which are crucial for ⁢future innovations. However, the tentative⁤ pricing ⁤based on market demand shows that volatility remains a concern, and investors will be closely watching this development.

**Editor:** how do you‍ think Kioxia’s IPO could affect the overall memory chip market?

**John⁣ Tanaka:** Kioxia’s ​successful IPO could set ‍a precedent, potentially motivating other companies in the sector ​to consider going public. ‍It will also signal to the market‍ that there is capital available for players in ⁤this​ industry. If Kioxia ​can leverage the funds effectively, it might lead to​ increased⁢ competition, innovation, and even pricing pressures in the memory chip ​market. it could be a‌ game-changer.

**Editor:** ⁢Thank you, John, for sharing your insights on Kioxia’s upcoming IPO and its implications ⁤for⁣ the industry.

**John Tanaka:** My ‍pleasure! I’m looking forward to seeing how this⁣ unfolds.