Japanese chip giant Kioxia plans to raise over $10 billion through an ADR listing

The leading Japanese storage chip company Kioxia is advancing its plan to go public in the United States. The company intends to raise funds by issuing American Depositary Receipts (ADRs), with a guaranteed minimum fundraising amount of $10 billion. This is one of the large-scale financing projects by Asian chip companies in the U.S. recently. To ensure the smooth progress of the listing, Kioxia has connected with several top Wall Street investment banks, and the cooperating institutions include major financial institutions such as Bank of America, Goldman Sachs and JPMorgan Chase. These investment banks will participate in the company's IPO preparation work in the coming year.

The overall plan is still in the preliminary discussion stage. The final number of issued shares, the specific fundraising amount, and the complete list of cooperating investment banks have not been fully determined. As of now, the accuracy of this news cannot be verified by the outside world. Kioxia has not responded externally during non-working hours regarding this matter. The entire project is still in the preparation stage, and the market can only rely on industry news to predict the subsequent trend.

This time, Kioxia's decision to go public in the U.S. was not a temporary decision but a key step in the company's long-term capital investment. Earlier, Kioxia had already carried out large-scale share buybacks in the Japanese market, spending billions of dollars to repurchase domestic circulating shares. The continuous buybacks have made the company's share capital structure in the Japanese stock market more concentrated, but they have also tightened the liquidity of stocks in the Japanese domestic market. This is also the core reason why the company insisted on issuing ADRs in the United States. The U.S. stock market has a larger capitalization and a wider coverage of global investors, which can solve the problem of insufficient stock liquidity.

In addition, going public in the U.S. has an implicit benefit. After successfully issuing ADRs, Kioxia has the opportunity to be included in the U.S. semiconductor-specific index. Once included in the index, it will bring long-term and stable incremental funds, boosting the stock valuation and price resilience, which is a resource advantage that the domestic market can not provide. Kioxia had already released the signal of going public in the U.S. in May this year. At that time, the company clearly stated that it planned to issue ADRs to reserve sufficient capital for its long-term development.

The timing of Kioxia's preparations for the U.S. listing is particularly important. Currently, the global technology sector is generally under pressure, and AI-related stocks have generally been on a correction trend. Many major AI company executives have jointly expressed their concerns and called for a slowdown in the pace of AI research and development to avoid potential security risks. This has led to a more cautious short-term market expectation of the AI and semiconductor sectors. AI-related stocks in the U.S., Europe and Asia have all weakened, and the overall profitability effect of these sectors is poor.

In such a market environment, Kioxia is firmly committed to its plan for a $10 billion IPO in the U.S., which clearly demonstrates the company's long-term confidence in the storage chip sector. Storage chips are the core basic hardware for AI computing power and data centers. No matter how the model development pace changes, the necessity of data storage and computing power support always exists. This is also the core strength behind Kioxia's decision to raise funds against the backdrop of the sector's adjustment. Not only it, many Asian technology and semiconductor enterprises are currently actively exploring the U.S. capital market.

Compared with directly going through an IPO in the U.S., issuing ADRs is the preferred method for overseas technology companies to list on the U.S. stock market, especially suitable for industry leaders such as Kioxia. The ADR model has the advantages of a simpler process and higher implementation efficiency, which can shorten the preparation cycle. For the company, adequate liquidity can stabilize the stock price and prevent the problem of sharp price fluctuations. ADR allows global investors to conveniently trade the company's shares, and can quickly improve the global liquidity of the stock.