Japanese chipmaker Kioxia postpones $3.2 billion IPO plan amid U.S.-China tensions

In this news, we discuss the Japanese chipmaker Kioxia postpones $3.2 billion IPO plan amid U.S.-China tensions.

TOKYO (Reuters) – Kioxia Holdings Corp, the world’s second-largest maker of flash memory chips, on Monday postponed plans for what would have been Japan’s largest initial public offering (IPO) this year, amid tensions -Chinese are darkening the global chip market.

Kioxia, formerly known as Toshiba Memory, had planned to list on the Tokyo Stock Exchange on October 6, offering up to 334.3 billion yen ($ 3.2 billion) in shares.

The delay shows how business and technology disputes between Washington and Beijing have cast a shadow over the global chip industry and affected companies in the supply chain.

“While we have generated considerable interest from many investors, the major underwriters and Kioxia do not believe it is in the best interest of current or potential shareholders to proceed with the IPO at this time of volatility. continued market and continued concerns about a second wave of the pandemic, ”Kioxia CEO and Chairman Nobuo Hayasaka said in a statement.

The company “would revisit an IPO at the appropriate time. We are not in a hurry, ”he added.

Earlier this month, Kioxia set a tentative price bracket for an IPO in Tokyo that put the market value below 2 trillion yen ($ 18.94 billion), the price that a group led by Bain Capital paid for the company two years ago.

Toshiba intended to return most of the IPO proceeds to shareholders and said it was disappointed with Kioxia’s move. Its shares fell 8.6% in early trade before cutting some of the losses to cut 3.7% by 12:30 a.m. GMT.

Bain Capital declined to comment.

Memory chip market braces for impact of tougher US restrictions on Huawei Technologies Co Ltd [HWT.UL] which came into effect on September 15.

Kioxia warned that the restrictions, which prohibit global suppliers from selling chips made using U.S. technology to the Chinese telecommunications giant without a special license, could lead to an oversupply of memory chips and lower market prices.

Reporting by Takashi Umekawa and Makiko Yamazaki; Editing by Chang-Ran Kim and Stephen Coates

Original © Thomson Reuters Corporation

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