According to the financial news app Zhutong Finance, it has been reported by the media citing insiders that Kioxia, the storage chip manufacturing giant supported by global private equity giant Bain Capital, has canceled its plan to go public on the Japanese stock market in October.

According to the media, last month, Bain Capital was in discussions with some investment banks to push for the IPO of this Japanese company considered a leader in the NAND flash memory chip field.

In the ideal expectations of investment banks, it was expected that Kioxia would raise about 0.5 billion dollars through the IPO, with a possible market cap exceeding 1.5 trillion yen (about 10.3 billion dollars). Investment banks originally widely expected the IPO to take place in October. If the IPO proceeds smoothly, Kioxia's IPO will be the largest initial public offering (IPO) on the Japanese stock market this year.

However, recent reports citing insiders indicate that competitors of Kioxia, including SK Hynix and Micron Technology (MU.US), are facing dramatic sell-offs in the stock market, and the lack of clear recovery in traditional enterprise storage market demand poses challenges for Kioxia's IPO pricing. Statistics show that the stock prices of South Korea's two major storage giants―Samsung Electronics and SK Hynix, as well as U.S. storage chip manufacturer Micron Technology, have recently dropped by about one-third from their historical highs.

In its research report 'Winter Is Coming' released on September 15th, Morgan Stanley on Wall Street presented a pessimistic outlook on global demand for storage chips, suggesting that the AI bubble closely related to storage chips is about to burst, expressing concerns about the profit prospects of South Korea's storage chip manufacturers SK Hynix and Samsung Electronics. In this report, the Morgan Stanley analysis team significantly lowered the target price of SK Hynix by 54%, from 0.26 million Korean won to 0.12 million Korean won, and lowered the target price of Samsung Electronics by 27.6%.

Morgan Stanley's report points out that the demand for traditional enterprise-side DRAM and NAND flash products with low AI relevance, especially enterprise SSDs, has not shown a clear recovery. In addition, there may be a supply surplus of enterprise-grade high-end DRAM/NAND storage chips used for AI training/inference systems and AI-dedicated HBM storage due to short-term capacity concentration, causing a significant drop in the stock prices of South Korea's two giant storage companies and Micron.

Insiders also pointed out that Kuaixia stated its preparation to go public in Japan at the appropriate time.

Bain Capital once led a consortium to acquire Kuaixia from Toshiba for 18 billion USD in 2018, and has also considered promoting Kuaixia's IPO multiple times.

It is understood that this Tokyo-headquartered company has previously discussed a potential large-scale transaction to integrate its NAND flash business with Western Digital Corporation (WDC.US), aiming to establish an entity that can challenge the NAND flash product market leader Samsung Electronics. However, this major discussion almost came to an end in October 2023. SK Hynix expressed concerns in antitrust consultations, disagreeing with the merger of Kuaixia and Western Digital flash memory business due to its impact on the company's investment value.

Kuaixia is the world's third-largest manufacturer of NAND flash products, with products mainly covering the fields of Flash and Solid-State Drives (SSD). It successfully spun off from Japan's Toshiba Corporation in 2018 and was renamed Kuaixia the following year. Bain Capital and South Korean chip maker SK Hynix jointly established a special purpose company holding up to 56% of Kuaixia's shares.