Pushing Forward Against the "AI Slowdown" Trend? Reports Suggest Kioxia Plans U.S. IPO to Raise at Least $10 Billion

According to Zhitong Finance APP, Japanese memory chip manufacturer Kioxia Holdings is considering raising at least $10 billion through an American Depositary Receipt (ADR) offering in the U.S., joining a number of AI-related companies looking to tap the world's deepest capital pool. Sources familiar with the matter said Kioxia has been in talks with Bank of America, Goldman Sachs, J.P. Morgan and other banks regarding a potential offering as early as next year. It is worth noting that news of this plan emerged on a day when concerns over slowing AI momentum triggered a global sell-off in chip stocks—the Nasdaq 100 index futures fell as much as 1.6% in early trading.

Key Points of the Deal: Liquidity, Shareholder Structure, and Index Inclusion

According to sources, who requested anonymity due to the private nature of the information, the Tokyo-headquartered memory manufacturer hopes to gain greater access to U.S. dollar liquidity by going public in the United States after repurchasing several billion dollars' worth of stock in Japan; issuing ADRs could also pave the way for Kioxia’s inclusion in U.S. semiconductor-focused stock indices. The current considerations are still at an early stage, and details such as the size of the offering and its banking partners may change. Representatives of Kioxia, Goldman Sachs, and J.P. Morgan declined to comment, while Bank of America did not respond to requests for comment.

Kioxia previously announced plans to issue ADRs in spring 2027 but disclosed few details; if the latest information is confirmed, it would mark the first indication of an offering exceeding $10 billion and could bring the timeline forward. Global semiconductor companies and other AI-related firms are seeking to capitalize on the sector’s investment fever. In July, South Korean memory chip maker SK Hynix raised $26.5 billion through a U.S. IPO, setting a record for the largest initial public offering by a foreign company.

Kioxia is a key global supplier of NAND flash memory—a storage component that has become one of the main beneficiaries in current AI infrastructure development. According to industry data cited by AInvest, the NAND market is projected to have a 4-5% annual supply gap by 2026; TrendForce predicts that contract prices could rise another 70-75% sequentially by mid-2026. Enterprise SSDs accounted for 43% of NAND market revenue in Q1 and are expected to surpass 60% by year-end, with servers now comprising more than 40% of NAND’s bit demand.

From Toshiba Castoff to Japan’s Market King: A 400% Roller Coaster Ride in One Year

Kioxia's predecessor was Toshiba's memory chip division—the pioneer of NAND flash technology. In 2018, the business was acquired by a consortium led by Bain Capital and renamed Kioxia the following year. When it listed on the Tokyo Stock Exchange in December 2024, it raised only 120 billion yen. The AI infrastructure boom has completely rewritten its fate: According to reports, Kioxia surpassed Toyota on June 12 this year to become the most valuable listed company in Japan, its market capitalization briefly exceeding 44 trillion yen (about $274 billion), and its annual gain topping 670%—the highest among stocks in the MSCI World Index.

The stock has since corrected along with the sector. Despite this, Kioxia’s Tokyo-listed shares are still up nearly 400% this year, with its current market cap at about $180 billion—down roughly one-third from its June peak. In July, Kioxia’s financial guidance was seen as conservative and interpreted as disappointing by the market. The company quickly announced a 3-for-1 stock split and a buyback plan of up to 800 billion yen (about $5.2 billion) to broaden its shareholder base and reduce price volatility. In May, both S&P and Fitch simultaneously raised Kioxia’s rating to BBB-, placing it in investment grade for the first time.

Financial Strength: Quarterly Operating Profit Surpasses the Prior Full Fiscal Year

This capital operation is underpinned by textbook cyclical performance. According to its financial report, in the most recent quarter ended June, Kioxia’s revenue reached 1.77 trillion yen, up 415% year-on-year, with overall average selling prices soaring 70% from the previous quarter; non-GAAP operating profit was 1.33 trillion yen with a 75% operating margin—quarterly operating profit has already exceeded the 870 billion yen for the entire previous fiscal year. Non-GAAP net profit for the quarter was 887 billion yen, with free cash flow up 3.4 times quarter-on-quarter to 827 billion yen. The company repaid all 408 billion yen of priority debt and entered a net cash position, with cash and equivalents reaching a record 791 billion yen. In February this year, Kioxia confirmed that all of its 2026 NAND capacity had been fully secured by clients, with some large-scale cloud customers expressing interest in long-term supply for 2027 and 2028.

Headwinds: Listing Timing Clashes with AI Slowdown Storm

The timing is the key issue. Analysts point out that Kioxia is weighing this issuance just as the stock market is being shaken by expectations that AI development could slow. Over the weekend, leading U.S. AI companies discussed implementing guardrails and impact assessments for advanced models, leading Nasdaq 100 futures to drop 1.6% early and the Philadelphia Semiconductor Index ETF to fall as much as 5.7%. The Asian market already priced in the news: Kioxia shares fell 6.4% in Tokyo, SK Hynix fell 6.4%, Samsung Electronics declined 4.1%, and SoftBank retreated 10.7%. Other capital events in the same sector are also shifting: Anthropic’s roughly $2 trillion valuation IPO is now shadowed by safety concerns and speculation it may need to amend its S-1 filing, while OpenAI has explicitly stated it will not go public in 2026.

Institutional Views

Opinions on the issuance are polarized. Bulls contend that a near-400% year-to-date rise means Kioxia has ample “paper profits” to realize, regardless of current sentiment, and that share buybacks and splits undertaken by management this year were always intended to stabilize prices ahead of a major capital event—logically leading to a U.S. issuance to attract deeper investor pools. If the issuance goes ahead, it would rank among the largest ever U.S. listings by a Japanese company, and stand as a symbolic event of AI capital concentrating in the storage segment. Lumida News analysis highlights the core issue: SK Hynix’s $26.5 billion ADR offering came at the peak of AI infrastructure investment enthusiasm last July, while Kioxia’s consideration of a similar move comes just as this enthusiasm faces its first real crack due to AI safety debates. The subscription status of a $10 billion-plus issuance will serve as a real-time test of whether demand for memory chip exposure can withstand the current AI slowdown narrative.

Cautious analysts focus on the risk of a cyclical peak. Research from AInvest points out that the rise of Chinese manufacturers and new global capacity coming online after 2027 could lead to oversupply in the medium term, making the current 75% operating margin unsustainable. More than two-thirds of Kioxia’s revenue depends on data centers and enterprise SSDs, while smartphones and laptops still account for nearly 40% of NAND demand and are in decline. Research from Gokhshtein notes two key verification points: the ADR’s discount or premium relative to the Tokyo listing—which will reveal whether U.S. investors see the AI memory story as overheated or still undervalued; and the fiscal 2027 ADS guidance at launch—which will clarify whether this surge is a case of pulling forward future earnings or a signal of sustainable profit growth.