Japan’s Kioxia Holdings Corp is focused on pursuing an initial public offering (IPO) as soon as this summer, rather than engaging with potential foreign acquirers and navigating foreign regulatory approvals, four people familiar with the matter said.
The maker of memory chips sees an IPO as the most promising route to realizing value for shareholders, including Toshiba Corp and Bain Capital, said the people, asking not to be named because the deliberations are private.
Their comments came after the Wall Street Journal reported Micron Technology Inc and Western Digital Corp are each exploring a potential deal for Kioxia.
The Tokyo-based company, which makes NAND flash memory chips, has been planning to go public since Toshiba sold a majority stake in the business to a consortium in 2018, including Bain, Apple Inc. and SK Hynix Inc.
The timing for an IPO has slipped because of volatility in the memorychip market, but stakeholders still believe a public offering is the best option for raising cash and rewarding shareholders, the people said.
Kioxia could be valued at more than US$36 billion in the current market, Ace Research Institute analyst Hideki Yasuda said.
Investor appetite for IPOs has surged in recent months, with tech companies such as Coupang Inc and DoorDash Inc soaring since their debuts.
A Kioxia spokesman said the firm would not comment on speculation, but it would continue to seek an appropriate time for the IPO.
Toshiba issued a statement saying it is aware of media reports on a potential deal, but it is not familiar with the details of the reports and could not comment.
Any potential acquisition would face steep regulatory hurdles, which could delay or kill a deal. The Japanese government opposed the sale of Toshiba’s chip business to a foreign buyer three years ago — a key reason Toshiba and Japan’s Hoya Corp together took a majority stake in Kioxia.
Perhaps more importantly, the Chinese government would have to sign off on any agreement and its regulators are likely to resist letting a US firm take over such a valuable business given the rising tensions between the two countries.
A key area of dispute between the US and China is the semiconductor industry, which the administration of former US president Donald Trump used to punish Chinese tech players, such as Huawei Technologies Co (華為).
Applied Materials announced earlier this week that it terminated a plan to acquire Kokusai Electric Corp as it could not get regulatory approval in a timely fashion.
A Western Digital or Micron purchase of Kioxia would consolidate the NAND memory market, reducing the number of top players to four from five.
That could benefit the companies by lowering costs and improving profits, though it might also draw antitrust scrutiny.
“The NAND memory industry may be structurally improved by consolidating if either Micron or Western Digital acquires Kioxia,” Bloomberg Intelligence analysts Anand Srinivasan and Marina Girgis wrote in a research note. “Micron is in a better financial position to pull it off and could benefit more in terms of margins, capacity, technology and capital spending. Regulators, especially in China, would closely eye such a merger.”
Micron and Western Digital rose 4.8 percent and 6.9 percent in US trading on Thursday.
Toshiba gained 4.6 percent in Tokyo Thursday and traded less than 1 percent higher yesterday.
UNWANTED ATTENTION: In the past two months, the automaker has made headlines, with a Chinese military ban of its vehicles and a protest at an expo Electric vehicle maker Tesla Inc, facing scrutiny in China over safety and customer service complaints, is boosting its engagement with regulators and beefing up its government relations team, industry sources said. Tesla’s change of strategy leading to more behind-the-scenes interaction with policymakers in Beijing compared with relatively little previously shows the seriousness with which the US automaker views the setbacks in its second-biggest market. TALKING SHOP It also comes at a time when China is trying to regulate large and powerful private companies, especially in the technology sector, on concerns about their market dominance. As they do elsewhere, regulators in China, the world’s biggest
Chinese electric vehicle (EV) start-up Nio Inc (蔚來) reported a narrower first-quarter loss, while warning that a global chip shortage would keep a lid on deliveries. The Shanghai-based company posted a net loss of 451 million yuan (US$68.8 million) in the three months ended March 31, compared with 1.69 billion yuan a year earlier, it said in a statement. It also marked an improvement on the 1.39 billion yuan net loss it posted in the fourth quarter of last year. Revenue rose to 7.98 billion yuan, beating estimates of 7.16 billion yuan. Nio delivered 20,060 vehicles in the quarter, a 423 percent increase from
Dell Technologies Inc has agreed to sell its Boomi cloud business to private equity firms Francisco Partners and TPG in a cash deal valued at US$4 billion, as part of efforts by chief executive officer Michael Dell to trim down the PC maker. The deal is expected to close by the end of this year, the companies said in a statement on Sunday without providing additional details of the terms. Dow Jones had earlier reported that the companies were near a deal. Boomi specializes in integrating different cloud platforms for companies and has more than 15,000 customers. Dell agreed to acquire the company for
Intel Corp wants 8 billion euros (US$9.7 billion) in public subsidies toward building a semiconductor factory in Europe, chief executive officer Pat Gelsinger was cited as saying on Friday, as the region seeks to reduce its reliance on imports amid a shortage of supplies. The pitch is the first time that Gelsinger has publicly put a figure on how much state aid he would want, as Intel campaigns to take on Asian rivals in contract manufacturing. “What we’re asking from both the US and the European governments is to make it competitive for us to do it here, compared to in Asia,”