Key points
- Kioxia weighing at least $10 billion from ADRs
- The listing plan dates to May, the number is new
- SK Hynix is its largest shareholder
- No comment from Kioxia or the three banks
Kioxia Holdings is considering raising at least $10 billion by listing American depositary receipts in the United States, Bloomberg reported Monday, citing people familiar with the matter. The listing itself is not news. The size is.
Then there is who already owns the company. SK Hynix is Kioxia's largest shareholder, so a US listing could revalue a stake held by one of Kioxia's main competitors. Kioxia has been talking to Bank of America, Goldman Sachs and JPMorgan Chase, and the offering may take place next year, according to the report. None of the three banks, and not Kioxia, replied to Bloomberg's request for comment.
Kioxia said in May that it was preparing an ADR listing to broaden its investor base, and its chief financial officer told shareholders the company would target the April to June window when its next fiscal year begins. So the plan, the vehicle and the rough timing were all on the record before Monday. What Bloomberg added is a figure, and $10 billion would make it one of the largest such offerings by a Japanese company.
The stated reasons are liquidity and index eligibility. Kioxia wants more of its stock trading in US hands after buying back a large block of shares at home, the 800 billion yen repurchase it completed in six days in August. When Kioxia first announced the plan in May, Andrew Jackson, head of Japan equity strategy at Ortus Advisors, told Bloomberg that "This will definitely improve the liquidity of Kioxia as it will become an ADR arb favorite, given I expect big liquidity in the US line too." An ADR line could also improve Kioxia's eligibility for US semiconductor indexes, depending on the listing structure and index rules. That's a different kind of demand: index money buys because the rules say to, not because it has a view on NAND pricing.
The shareholder who is also the competitor
SK Hynix's position in Kioxia is indirect and easy to state wrong. The registered top holder is BCPE Pangea Cayman2, a Bain Capital vehicle that holds 77.4 million shares, or 14.19%, which overtook Toshiba at 14.12% in August. SK Hynix holds convertible bonds covering substantially all of that vehicle's voting rights, which is what makes it the effective largest shareholder. We covered how that happened at the time, and the full ownership chain earlier in August.
The stake dates to 2018, when SK Hynix put 395 billion yen into the Bain-led consortium that bought Toshiba Memory. It agreed then to keep its holding at or below 15% of Kioxia's voting rights until 2028 unless Kioxia agrees otherwise. That cap is the part to watch in a capital raise. If the deal includes newly issued shares rather than existing ones, it would dilute current holders, and SK Hynix sits close enough to its ceiling that the structure matters to it more than to an ordinary shareholder.
For Samsung Electronics and SK Hynix as NAND producers, the read is simpler. A competitor that could gain access to as much as $10 billion in US equity capital has more to spend on capacity, and Kioxia has been signalling exactly that. It already plans to spend about 470 billion yen a year through fiscal 2028, and Nikkei Asia reported in August that it wants a new $6.3 billion memory plant in Japan on top of that. Supply that arrives in 2028 is not a 2026 problem, but it is the kind of thing that sets what buyers are willing to pay for a long-term contract now.
What is not settled
Quite a lot. The exchange, the final size and the structure have not been decided, the offering needs US regulatory clearance, and the only figure in circulation comes from unnamed sources rather than a filing. Kioxia has not confirmed the $10 billion, and a company that declines to comment on a number has not agreed to it.
The news landed on a bad day for memory. Micron Technology (MU) was down about 6%, Sandisk (SNDK) about 5% and Western Digital (WDC) about 4% by mid-morning in New York, as the whole AI complex sold off after three lab chief executives called for a slowdown. SK Hynix's US line was down about 6%. Kioxia itself trades in Tokyo under 285A and has no ordinary US listing, which is the gap the ADR issue is meant to close. Until it does, an American investor who wants the NAND cycle is buying Sandisk, Micron or Western Digital instead.
