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A Huawei factory in Dongguan, China, last year. Sales to Huawei make up a significant portion of Kioxia’s revenue.
Photo:
Kin Cheung / Associated Press
A Japanese semiconductor maker canceled what was to have been one of the largest share offerings this year, after previously saying that US export restrictions on China’s Huawei Technologies Co. were hurting its business.
Kioxia Holdings Corp., owned by a consortium led by Bain Capital, had planned to list its shares on the Tokyo Stock Exchange on October 6 at a price that would give the company a valuation of around $ 16 billion. It had already lowered the expected listing price and warned about Huawei’s problem.
Kioxia said on Monday it would postpone the initial public offering indefinitely, providing one of the biggest concrete examples of how the recent battle between the United States and China over technology is affecting companies around the world.
The company did not mention Huawei in its press release. He offered the coronavirus pandemic and stock market volatility as reasons for the decision without giving details.
The Japanese flash memory chip maker has said its sales to Huawei account for a sizable chunk of overall revenue and will likely be subject to US export restrictions.
In August, the US Commerce Department said that non-US companies would need a special license to sell chips made with US technology to Huawei. Since many chips use American technology in some form, the rule is likely to place severe limits on Huawei’s ability to source parts for its telecommunications equipment and smartphones.
In addition to slowing down business with Huawei, the US restrictions may lead to oversupply and price drops for flash memory products, Kioxia said.
Kioxia was previously known as Toshiba TOSYY -4.99%
Memory and Toshiba Corp. retain a stake of about 40%. Toshiba shares fell more than 3% in early Tokyo trading on Monday, while the overall market rose.
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It appeared in the print edition of September 28, 2020 as ‘Japanese chip company cancels its big listing’.
