Japan’s Kioxia Holdings Corp. is focused on pursuing an initial public offering as soon as this summer, rather than engaging with potential foreign acquirers and navigating foreign regulatory approvals, according to four people familiar with the matter.

The maker of memory chips sees an IPO as the most promising route to realizing value for shareholders, including Toshiba Corp. and Bain Capital, said the people, asking not to be named because the deliberations are private. Their comments came after the Wall Street Journal reported Micron Technology Inc. and Western Digital Corp. are each exploring a potential deal for Kioxia.

The Tokyo-based company, which makes NAND flash memory chips, has been planning to go public since Toshiba sold a majority stake in the business to a consortium in 2018, including Bain, Apple Inc. and SK Hynix Inc. The timing for an IPO has slipped because of volatility in the memory-chip market, but stakeholders still believe a public offering is the best option for raising cash and rewarding shareholders, the people said.

Kioxia could be valued at some ¥3.32 trillion in the current market, said Hideki Yasuda, an analyst at Ace Research Institute. Investor appetite for IPOs has surged in recent months, with tech companies such as Coupang Inc. and DoorDash Inc. soaring since their debuts.

A Kioxia spokesman said the company won’t comment on speculation, but it would continue to seek the appropriate time for the IPO. Toshiba issued a statement saying it was aware of media reports on a potential deal, but that it was not familiar with the details of the reports and couldn’t comment.

Any potential acquisition would face steep regulatory hurdles, which could delay or kill a deal. The Japanese government opposed the sale of Toshiba’s chip business to a foreign buyer three years ago — a key reason Toshiba and Japan’s Hoya Corp. together took a majority stake in Kioxia.

Perhaps more importantly, the Chinese government would have to sign off on any agreement and its regulators are likely to resist letting an American company take over such a valuable business given the rising tensions between the two countries. A key area of dispute between the U.S. and China is the semiconductor industry, which the Trump administration used to punish Chinese tech players such as Huawei Technologies Co.

Applied Materials announced earlier this week that it terminated a plan to acquire Kokusai Electric Corp. as it couldn’t get regulatory approval in a timely fashion.

A Western Digital or Micron purchase of Kioxia would consolidate the NAND memory market, reducing the number of top players to four from five. That could benefit the companies by lowering costs and improving profits, though it may also draw antitrust scrutiny.

"The NAND memory industry may be structurally improved by consolidating if either Micron or Western Digital acquires Kioxia,” Bloomberg Intelligence analysts Anand Srinivasan and Marina Girgis wrote in a research note. "Micron is in a better financial position to pull it off and could benefit more in terms of margins, capacity, technology and capital spending. Regulators, especially in China, would closely eye such a merger.”

Micron and Western Digital rose 4.8% and 6.9% in U.S. trading Thursday. Toshiba gained 4.6% in Tokyo Thursday and traded less than 1% higher on Friday.

A deal for Kioxia is unlikely, said one of the people familiar with the matter. The company is not engaged in any acquisition talks, though it’s possible shareholders such as Bain are considering alternatives to an IPO, said another person.

It’s not clear whether investors would be able to press Kioxia into a potential buyout. Hynix competes in the memory-chip business so it may be reluctant to see Kioxia fall into the hands of a rival.

The Nikkei newspaper reported that Western Digital and Micron had queried Kioxia about a possible acquisition, but the talks fizzled.

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