Kioxia Holdings Corp. has no immediate plans to proceed with an initial public offering, as the Japanese maker of NAND memory chips grapples with a steep drop in demand.
(Bloomberg) — Kioxia Holdings Corp. has no immediate plans to proceed with an initial public offering, as the Japanese maker of NAND memory chips grapples with a steep drop in demand.
The company, spun out of troubled industrial group Toshiba Corp., has been waiting for the right time to go public to help finance the ever-increasing capital spending required to keep pace with far bigger rival Samsung Electronics Co. and peers SK Hynix Inc. and Micron Technology Inc.
A steep downturn, exacerbated by US curbs on China’s access to advanced chips, has been foiling Kioxia’s IPO plans. Following years of pandemic-driven demand, client technology firms are now rushing to use up record-level stockpiles of chips at a time when interest rates and oil prices dent consumer appetite and fuel recession fears.
“Now is not the time,” Kioxia Chief Executive Officer Nobuo Hayasaka said at a news conference at the company’s facilities in Yokkaichi, western Japan, on Wednesday. “We remain on the alert for the best possible timing for an IPO, but as always will also evaluate other financial options.”
Global chipmakers are slashing capital spending to cope with rising inventory and sharp declines in demand and chip prices. South Korea’s Hynix earlier in the day said it is cutting its capital expenditure for next year by half, or possibly more, warning of an “unprecedented” drop in demand. NAND chip prices fell by more than 20% in the quarter ended in September, compared with the previous quarter, it said.
Kioxia last month said it was cutting wafer production starts by 30% beginning this month, which would correspond to a 30% drop in output in December.
“Memory market conditions are severe,” Hayasaka said, noting that demand was weak from makers of PCs, smartphones and data centers, even while a weak yen was helping to bolster revenue. “I can’t say when a recovery will begin.”
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