• Kyodo

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Kioxia Holdings Corp. is preparing to go public on the Tokyo Stock Exchange as early as September after heightened U.S.-China tensions led to the postponement of the Japanese chipmaker’s planned debut last year, sources familiar with the plan said.

The envisaged listing of Kioxia, formerly known as Toshiba Memory Holdings Corp., comes as robust demand for semiconductors is giving a boost to chipmakers and their share prices.

The firm is expected to submit an application to the Tokyo bourse this month to list its shares, likely on the first section, the sources said Wednesday.

Kioxia postponed its plan to go public last October after the United States under then President Donald Trump restricted exports to Huawei Technologies Co., a buyer of Kioxia chips.

Kioxia manufactures flash memory chips for personal computers and smartphones, and its debut, with an estimated market capitalization of ¥1.5 trillion ($14 billion) at the time, would have been one of the largest initial public offerings in Japan last year.

The company had planned to raise funds to step up investment and better compete with foreign rivals such as South Korea’s Samsung Electronics Co.

Keeping up large investments is seen as critical to maintaining a competitive edge in the often volatile chip market.

The coronavirus pandemic has boosted demand for semiconductors, used in everything from laptops and game consoles to cars, and supplies are tight globally.

In the business year that ended in March, Kioxia’s net loss shrank to ¥24.5 billion from ¥166.7 billion a year earlier as sales grew 19.4% to ¥1.18 trillion.

A consortium led by U.S. private equity fund Bain Capital purchased the former Toshiba Corp. unit in 2018 and obtained a majority stake as Toshiba was undergoing sweeping restructuring after an accounting scandal and the bankruptcy of a U.S. nuclear plant unit.

The Japanese industrial conglomerate still owns a stake of around 40% in Kioxia but plans to reduce its holding and use most of the proceeds to reward Toshiba shareholders through dividends and other means.

Toshiba is currently embroiled in a fresh governance scandal due to alleged collusion with the government to prevent foreign activist investors from influencing the board.

The company faces the challenge of mending fences with vocal shareholders after two nominees for board directors were rejected at a general shareholders’ meeting earlier this month.

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