Storage demand recovery weak, TransferHero cancels IPO in the Japanese stock market.

According to media reports citing informed sources, Kioxia, a storage chip manufacturing giant supported by global private equity giant Bain Capital, has canceled its plans to list on the Japanese stock market in October. Last month, Bain Capital was reportedly in discussions with some investment banks to push for the IPO of this Japanese company, which is considered a leader in the NAND flash memory chip sector. The investment banks had initially expected Kioxia to raise about $500 million through the IPO, with a potential market value of over 1.5 trillion yen (approximately $103 billion). The IPO was widely expected to take place in October. If successful, Kioxia's IPO would be the largest initial public offering (IPO) in the Japanese stock market this year. However, media reports citing informed sources revealed that Kioxia's IPO pricing has become challenging due to the recent sharp sell-off faced by its competitors in the stock market including SK Hynix and Micron Technology, Inc., and the lack of significant recovery in traditional storage market demand. Statistics show that the stock prices of the two largest storage giants in South KoreaSamsung Electronics and SK Hynix, as well as the U.S. storage chip manufacturer Micron Technology, Inc., have fallen by about one-third from their recent highs. In a research report titled "Winter is Coming" released on September 15, Wall Street major Morgan Stanley presented a pessimistic outlook on global demand for storage chips. They believe that the AI bubble closely related to storage chips is about to burst and expressed concerns about the profit outlook for South Korean storage chip manufacturers SK Hynix and Samsung Electronics. In this report, the Morgan Stanley analysis team significantly reduced the target price for SK Hynix by 54%, from 260,000 Korean won to 120,000 Korean won, and lowered the target price for Samsung Electronics by 27.6%. The report pointed out that the demand for enterprise-side traditional DRAM storage and NAND flash products with low AI relevance, especially enterprise SSDs, has not shown significant signs of recovery, and there may be an oversupply of enterprise-level high-end DRAM/NAND storage chips used in AI training/inferencing systems and AI-specific HBM storage due to short-term capacity concentration. This report has caused a significant drop in the stock prices of the two large South Korean storage giants and Micron. Informed sources also mentioned that Kioxia stated it is prepared to list in Japan at an appropriate time. Bain Capital had led a consortium to acquire Kioxia from Toshiba for $18 billion in 2018, and has considered pushing for an IPO for Kioxia multiple times in the past. The company, headquartered in Tokyo, had been in discussions for a potential major deal to integrate its NAND flash business with Western Digital Corporation, aiming to create an entity that could challenge NAND flash product market leader Samsung Electronics. However, this major discussion came to a near end in October 2023. SK Hynix expressed concerns in antitrust consultations, as they did not agree to the proposed merger of Kioxia and Western Digital Corporation's flash memory business due to the impact on the company's investment value. Kioxia is the world's third-largest NAND flash product manufacturer, with products primarily in the flash (FLASH) and solid-state drive (SSD) fields. It successfully spun off from Japanese company Toshiba in 2018 and was renamed Kioxia the following year. Bain Capital and South Korean chip manufacturer SK Hynix jointly own up to 56% of the company through a special purpose company.