Kioxia's IPO Dream Deferred Again Amid Market Turbulence and Valuation Hurdles

Japanese memory chip maker Kioxia Corp, backed by Bain Capital, has halted its plans for an initial public offering in October as per sources familiar with the matter. This marks yet another postponement for the company which had previously aimed to go public in 2020 and 2021, but those attempts also faltered.

Bain Capital, which led the consortium that acquired Toshiba's memory division in 2018, expected to recoup investments through the IPO by selling shares. Kioxia, renamed after the acquisition, had also planned to issue new stock to raise additional funds. However, the recent downturn in peer company stock prices, notably the one-third declines seen by industry giants like Micron Technology and Samsung Electronics, has rendered their valuation target of 1.5 trillion yen ($10 billion) significantly more challenging.

A Kioxia spokesperson confirmed that while the company is preparing for a future IPO, they were not willing to provide further details at this time. Bain Capital also refrained from commenting on their next steps. This continuous delay spotlights the pressures faced by Kioxia, as the enduring fall in NAND chip prices continues to strain the company's capabilities to invest in new technologies and production capacities.

The delay of Kioxia's IPO, which was anticipated as potentially one of Japan’s largest this year, reflects broader market challenges but also highlights the company's struggle to maintain a competitive edge against technological leaders such as Samsung and SK Hynix. Despite Japan’s current robust IPO landscape, experts suggest that Kioxia might attempt to reignite its listing efforts in the future.