Toshiba Memory Holdings Corp. is set to postpone its initial public offering to early next year, dropping its original target of the end of this year, due to poor earnings amid sagging demand for semiconductors, sources said Thursday.
The world’s second-largest producer of flash memory chips after Samsung Electronics Co. has seen sales of chips used in smartphones fall due to the trade dispute between China and the United States, the sources said.
The former chip subsidiary of Toshiba Corp. initially aimed to go public on the first section of the Tokyo Stock Exchange in September this year, after it was sold to a consortium led by U.S. private equity fund Bain Capital for about ¥2 trillion ($18 billion) in June last year.
Toshiba was forced to spin off the crown-jewel unit due to serious financial difficulties, but it still holds 40.2 percent of Toshiba Memory’s shares.
In the January-March period of fiscal 2018, Toshiba Memory booked an operating loss of ¥28.4 billion and a net loss of ¥19.3 billion.
The company’s earnings were also affected by a blackout in mid-June at its mainstay plant in Mie Prefecture, which suspended a part of the production line.
Toshiba Memory is set to open a new plant in Iwate Prefecture in the fall as its second domestic production base, but the outlook for the semiconductor market remains uncertain, the sources said.
The company said earlier this month it would rebrand itself as Kioxia Holdings Corp., dropping the name of the Japanese conglomerate, from October.
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