As Kioxia Holdings Corp. considers another listing amid a NAND market surge, its shareholder SK hynix Inc. sees potential value in the listing as it seeks to recover its investment in the company.

Japanese newspaper Yomiuri Shimbun reported on Tuesday that Bain Capital LP, a U.S. investment fund that holds over half of Kioxia‘s shares, met with Japanese lenders the previous day, proposing a listing of the company to raise funds.

Formerly Toshiba Corp.’s memory semiconductor business, Kioxia was spun off as a separate entity in 2018. SK hynix invested 2.7 trillion won ($1.9 billion at current won-dollar rate) in the fund formed by Bain Capital at Kioxia‘s launch, acquiring convertible bonds worth 1.3 trillion won. The Bain Capital consortium holds a 56 percent stake in Kioxia.

Kioxia faced challenges until 2023 due to the sluggish demand for memory chips and recorded a net loss of 254 billion yen ($1.6 billion) in the second to fourth quarters of 2024, posing difficulty in refinancing 900 billion yen in loans that are due in June. Challenges also remain in research and development spending as well as facility investments, but the anticipated surge in demand for memory semiconductors driven by artificial intelligence (AI) proliferation and data center expansion has brightened prospects for the company’s potential listing. The memory chip market has seen an uptick since the fourth quarter of 2023, and the high levels of attention paid to chip-related stocks on the Tokyo Stock Exchange also bodes well for the listing.



Kioxia previously sought a listing in October 2020, but the plan was hampered by concerns about performance after the U.S. government tightened regulations on large Chinese telecom equipment companies, who were Kioxia‘s main customers. The company prepared for a listing again in 2021, but market downturns frustrated this plan and a merger with Western Digital Corp. (WD) fell through two years later.

Analysts speculate that SK hynix could seek a priority sale of its Kioxia shares via the listing, and this could potentially facilitate Kioxia’s attempted merger with WD. The move could enable SK hynix to recover its investment in Kioxia and secure funds for high-bandwidth memory (HBM) investments. But even if it does not sell its stake, SK hynix can significantly reduce the burden of valuation losses in the trillions of won accumulated over the past few years if Kioxia’s corporate value increases during the listing process. “The increase in Kioxia‘s stock value is beneficial to SK hynix in many ways,” an industry insider said.

Meanwhile, the growing demand from data centers also positively impacts SK hynix’s NAND business, Solidigm. Launched in 2021 when SK hynix acquired Intel Corp.’s NAND business for $9 billion, Solidigm‘s assets mainly consist of the solid-state drive (SSD) business division and a semiconductor factory in Dalian, China. It faced difficulties, however, after SK hynix’s acquisition due to U.S. export controls on chip equipment made in China. “Solidgim is acting quickly to ride the upward trend as one of its strengths is enterprise SSD,” the industry insider said.

By Lee Seung-hoon, Choi Seung-jin and Chang Iou-chung

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