US-China Tensions Shake Japan's Semiconductor Industry... IPO Listing Unlikely Within This Year

Kioxia, the World's 2nd Largest NAND Flash Memory Manufacturer, Faces IPO Cancellation Risk
This Year's Largest Japanese IPO... Performance Uncertain Due to Huawei Sanctions

[Asia Economy Reporter Kwon Jae-hee] The planned listing schedule for Kioxia (formerly Toshiba Memory), which was considered the largest initial public offering (IPO) on the Japanese stock market this year, is now at risk of being canceled. As the United States has intensified sanctions against China's Huawei, escalating tensions between the U.S. and China, the Japanese semiconductor industry has also been directly impacted.

According to the Nihon Keizai Shimbun on the 28th, Kioxia is scheduled to hold a board meeting on the same day to discuss the postponement of the IPO. Kioxia, the world's second-largest NAND flash memory semiconductor manufacturer, had originally planned to list on the Tokyo Stock Exchange on October 6.

Under the original plan, Kioxia was expected to announce its public offering price on the 28th, with a market capitalization at listing estimated at $3.2 billion (approximately 3.76 trillion KRW), raising expectations as the largest IPO in Japan this year.

According to an insider familiar with the matter, "Due to the U.S. government's regulations on Huawei, which accounts for the majority of Kioxia's clients, the uncertainty in the business environment has increased, leading to a cautious review of the listing timing," adding, "They plan to prepare again aiming for a listing at the end of this year or early next year."

It is known that after the U.S. implemented sanctions on Huawei on the 15th of this month, Kioxia stopped supplying NAND memory for smartphones to Huawei.

Kioxia is a strong player in the flash memory sector, with smartphone NAND flash memory sales accounting for 40% of its total sales.

Another factor cited for the IPO delay is the failure to receive an appropriate corporate valuation. When the Korea-U.S.-Japan consortium acquired Kioxia two years ago, the company was valued at 2 trillion yen (approximately 220 trillion KRW), but currently, it is said that the valuation on the Tokyo Stock Exchange is just over 1.5 trillion yen.

Meanwhile, Toshiba's stock price fell as much as 8.6% intraday on the day following the news of the Kioxia IPO postponement.