In the fierce competition in the global semiconductor industry, Kioxia's IPO journey can be described as ups and downs. The world's third-largest NAND Flash manufacturer has experienced a series of challenges from its initial IPO plan to its third attempt, including market turmoil, technological competition, and shareholder disagreements. This process not only reflects the uncertainty of the memory chip industry, but also reflects the far-reaching impact of the global economic environment on the listing of enterprises. China Exportsemi will provide an in-depth analysis of Kioxia's IPO background, explore the reasons for its delay, and predict the success or failure of its latest IPO plan.
Kioxia's IPO Background: From Toshiba Memory to the World's No. 3
Kioxia's predecessor was Toshiba Memory, which was founded in 2017. At that time, in response to the company's operational difficulties, Toshiba sold a controlling stake in its storage business and changed its majority shareholder to a consortium led by Bain Capital. In 2019, the company officially changed its name to Kioxia (meaning "memory" and "value"), symbolizing the company's commitment to value creation in the storage space.
As a major player in the NAND Flash market, Kioxia's products cover a wide range of applications, from smartphones to data centers. In 2020, Kioxia first proposed an IPO with the goal of listing on the main board of the Tokyo Stock Exchange. However, this plan has been shelved indefinitely due to the impact of the external environment such as the global pandemic and geopolitical conflicts.
The underlying reasons for the successive blockages of the listing plan
Kioxia faced a number of challenges in each of its three IPO attempts, both due to pressures within the industry and adverse macroeconomic impacts.
1. Memory chip market volatility
memory chip industry is significantly affected by the supply and demand cycle, and the continued low price of NAND Flash is one of the key reasons for the postponement of Kioxia's listing plan. The decline in global market demand in 2021, coupled with the technology and market share leadership of rivals Samsung and SK hynix, weighed on Kioxia's performance.
2. Shareholder valuation divergence
Major shareholder Bain Capital wants to push for an IPO at a valuation of 1.5 trillion yen, while potential investors believe that market conditions are not enough to support this target valuation and hope to reduce it to 800 billion yen. The conflict between the two sides led to the cancellation of Kioxia's second IPO plan in October 2022.
3. Technological Backwardness and Profitability Questioning
Kioxia's technological skills have improved, but they still lag behind their major competitors. Although the BiCS FLASH technology used has made breakthroughs in energy efficiency and reliability, it has failed to form a significant differentiation in the market competition. In addition, although revenue for the second quarter of fiscal 2024 increased by 12.22% quarter-on-quarter to 480.9 billion yen, this achievement is more due to the recovery of the industry than the improvement of technological competitiveness.
Picture: Kioxia's listing has been full of twists and turns, and the third departure will be possible, can it get its wish?
Third IPO Plan: Confidence and Challenges
In December 2024, Kioxia will make its third attempt to go public, with a target market capitalization of 750 billion yen (about 4.85 billion US dollars) and plans to raise about 100 billion yen (about 645 million US dollars). Compared with the previous two attempts, the IPO plan has shown stronger execution and confidence in the following aspects:
1. The purpose of the funds is clear: Focusing on AI and cutting-edge products,
Kioxia plans to use the new funds for artificial intelligence (AI)-related storage technology research and development and the expansion of production facilities. The development of AI technology has opened up new market opportunities for memory chips, especially in the fields of large model training, autonomous driving, and edge computing, and the demand for efficient storage has surged.
2. The market environment is gradually picking up
With the acceleration of global digital transformation and the rise of emerging fields such as artificial intelligence and big data, the demand for memory chips has shown restorative growth. In particular, the recovery of the automotive, industrial and consumer electronics markets is expected to provide a positive boost to demand for Kioxia's products.
3. Internal Structural Optimization
Since 2023, Kioxia has continued to focus on internal processes and technology research and development, not only strengthening functional safety and reliability, but also accelerating the collaboration project with Western Digital. These measures have improved its market competitiveness and provided better support for its post-IPO performance.
Still, Kioxia faces a number of challenges. Its main rivals, Samsung and SK hynix, have always been leading in terms of market share and technological breakthroughs, while Kioxia's market share is slightly weaker. Coupled with global economic volatility and geopolitical uncertainty, the outcome of this IPO is still uncertain.
Kioxia's Future Prospects: Can It Turn the Tide?
The success of Kioxia's IPO will have a profound impact on its future position in the global semiconductor market. If the IPO is successfully completed, Kioxia will receive the funds it needs to further expand its R&D investment in the high-end memory chip market and help companies win the technology competition.
However, Kioxia also needed to address the following issues:
1. Bridging the technology gap: Accelerate technology research and development, especially to higher-density, lower-power memory chips.
2. Market expansion strategy: While consolidating existing customers, we will develop emerging markets, such as new energy vehicles and the Internet of Things.
3. Profitability improvement: Strengthen cost control and supply chain management to cope with cyclical fluctuations in the industry.
Conclusion: Three departures to meet the challenge
Kioxia's path to IPO has been full of twists and turns, but it has also witnessed the company's resilience in the face of adversity. As a key player in the global memory chip market, Kioxia has a dual mission to promote technological progress and strengthen market competition. If the IPO can be successfully promoted, it will provide strong capital support and market trust for its future development.
However, the competitive landscape in the future is still complex and changeable, and Kioxia's listing is just a new starting point. How to use the power of the capital market to carry out technological innovation and market expansion will be the key to whether it can achieve corner overtaking in the global semiconductor industry. In this context, Kioxia not only needs to stick to its original intention, but also rise to the challenge and contribute to the future of the global memory chip industry.
