Kioxia Holdings IPO Surge

Investing.com — Kioxia Holdings, a Japanese chip maker, experienced a 10% rise in shares during its initial public offering (IPO), closing at 1,601 yen.

This increase reflects strong investor interest in semiconductor manufacturers, benefitting from the ongoing artificial intelligence boom. Currently, Kioxia's market capitalization is ¥863 billion, equivalent to $5.62 billion.

As part of the IPO, Kioxia issued new shares, while major stakeholders Bain Capital and Toshiba Corp. (TYO:6502) divested portions of their holdings.

Kioxia, supported by Bain Capital, manufactures NAND flash-memory chips utilized in devices like smartphones and computer servers. Anticipating growth in the flash-memory sector, Kioxia cites heightened demand driven by AI applications and data centers.

The company partners with Western Digital (NASDAQ:WDC) to produce solid-state drives and NAND chips.

Despite chip-making profitability during tech booms, Kioxia admits its exposure to market downturns. The company expects a decline in revenue and net profit for the December quarter compared to the previous three months.

In the first half ending in September, Kioxia reported a net profit of ¥176 billion, rebounding from a loss during the same timeframe last year, accompanied by an 85% revenue increase to ¥909 billion. Nevertheless, for the fiscal year ending in March, Kioxia faced a widening net loss amid declining revenue.

For its IPO, Kioxia offered 82.7 million shares, including 21.6 million newly issued shares.

On Wednesday, Kioxia expressed intent to urge major shareholders to decrease their stakes to meet a public float requirement of 35% or more within five years, up from the current 28%.

At listing, Toshiba (OTC:TOSYY) held a 32% stake, while Japanese company Hoya owned 3.0%.

In November, Kioxia reported that competitor SK Hynix could gain control over a Bain Capital entity holding a stake in Kioxia, should the Korean company convert its bonds into shares of that entity. Currently, this entity has a 14% stake.

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