Japanese chipmaker Kioxia eyes December IPO

Tokyo — Japanese chipmaker Kioxia has filed for an initial public offering (IPO) that sources expect to be as soon as December.

The IPO registration marks a new attempt to go public. The Bain Capital-backed company scrapped plans for an IPO in October after investors pushed the US buyout firm to almost halve the ¥1.5-trillion ($9.8bn) valuation it sought, according to sources.

Kioxia is the first company to have chosen to operate under Japan’s new rules that allow firms to communicate with potential investors before receiving listing approval from the Tokyo Stock Exchange.

The chipmaker expected approval in late November and would release an indicative price for the shares then, the sources said.

Kioxia’s filings indicate it aims to conduct the IPO between December and June.

A Bain-led consortium acquired Kioxia from scandal-hit Toshiba six years ago for ¥2-trillion.

The chipmaker, formerly Toshiba Memory, pays Bain an annual business consulting fee of ¥1bn, which will cease with the listing. But Kioxia will owe the buyout firm an additional ¥3.5bn.

Kioxia competes with overseas rivals such as Samsung Electronics and SK Hynix. It has been hammered by a downturn in the market for memory chips, with the industry debating the durability of a recent recovery in prices.

In one encouraging sign, it reported a 32% rise in operating profit to £166bn in the July to September quarter compared to three months earlier. It also plans to expand capacity on the back of the boom in chips for artificial intelligence applications.

Kioxia is focused on Nand flash memory technology, which it invented in the 1980s, with customers Apple and Dell making up 21% and 9% of its sales, respectively, in the year to end-March.

Morgan Stanley, Nomura and Bank of America Securities are joint global co-ordinators for the IPO.

Reuters