[News] Why Is Kioxia Delaying Its IPO? Market Valuation Reportedly Half of Target

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Japanese NAND flash memory giant Kioxia had reportedly planned to delay its October IPO. According to the latest report from Reuters, Kioxia’s major shareholder, U.S. investment firm Bain Capital, abandoned the October IPO plan after investors valued the company at only half of its target.

Reuters reported on the 11th that sources familiar with the matter said investors, citing the slow recovery of the semiconductor market, requested Bain Capital to slash Kioxia’s IPO valuation (market cap at the time of listing) to around half of the target value. This led Bain to abandon the plan to list Kioxia at the end of October.

The report cited two sources stating that while Bain Capital had set a target valuation of 1.5 trillion yen, investors valued the company at around 800 billion yen, far below the initial goal. One source added that during discussions with institutional investors in August and September, most agreed that the memory market still needed time to fully recover.

Although Bain Capital and Kioxia will continue to seek an opportune moment for the IPO, most market insiders believe that listing within this year will be challenging.

When the delay in Kioxia’s IPO was first reported in late September, TrendForce noted that the NAND flash market began to show signs of a price reversal in the third quarter of 2024 after three consecutive quarters of profit recovery.

Along with weak consumer demand, some companies have also slowed down their AI server deployments, potentially leading to an oversupply. With investors expressing concerns about the industry’s outlook, Kioxia’s decision to go public at this time may not yield a favorable valuation. The company has therefore opted to strategically delay the IPO, waiting for a market recovery.

According to TrendForce data, Kioxia maintained its position as the third-largest NAND flash brand by revenue in Q2, with a market share of 13.8%. Samsung led the market with 36.9%, followed by SK Group at 22.1%.

(Photo credit: Kioxia)