Kokusai Electric, a Japanese chip tool company, launches $750 mln IPO.

Kokusai Electric, a Japanese chip tool company, launches $750 mln IPO.

Japan’s Largest IPO in Five Years: Kokusai Electric Plans to List on Tokyo Stock Exchange

TOKYO, Sept 21 (ANBLE) – In an exciting development for the chipmaking industry, Kokusai Electric, a leading manufacturer of chipmaking equipment, has announced its plans to go public. The company is set to list on the Tokyo Stock Exchange on October 25, potentially making it Japan’s largest initial public offering (IPO) in five years. At an indicative price of 1,890 yen per share, Kokusai Electric will offer 111.2 billion yen ($749.88 million) worth of shares, with a market value of 435.5 billion yen.

Kokusai Electric’s journey to the IPO began when private equity group KKR purchased Hitachi’s electronic equipment unit in 2017, valuing the business at 257 billion yen. The following year, KKR spun off Kokusai Electric, which specializes in manufacturing machines for depositing thin films on silicon wafers. In 2019, KKR attempted to sell Kokusai Electric to Applied Materials for $3.5 billion, but the deal fell through due to regulatory hurdles in China.

The successful listing of Kokusai Electric would follow the highly anticipated New York IPO of chip designer Arm, which generated significant investor enthusiasm and paved the way for more stock market launches. Japan has seen a surge in IPO activity, fueled by the country’s record-breaking stock market and ultra-low interest rates.

Kokusai Electric’s decision to go public comes at a time when the chip industry is facing mixed market sentiments. While there is growing excitement about artificial intelligence, the market for electronics such as smartphones and personal computers has experienced a slowdown. Last week, leading contract chipmaker TSMC caused a stir when it instructed suppliers to delay orders of chipmaking equipment, citing concerns about demand. In line with these industry trends, Kokusai Electric reported a 20% drop in operating profit for the fiscal year ending March, totaling 56 billion yen. However, the company’s sales remained relatively steady at 245.7 billion yen.

For KKR, the successful IPO of Kokusai Electric could help improve its image in Japan. The private equity group faced challenges last year when its portfolio company, auto parts supplier Marelli Holdings, requested a massive debt waiver and incurred significant losses for major banks.

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In conclusion, Kokusai Electric’s upcoming IPO marks an important milestone for the chipmaking industry in Japan. As the company prepares to list on the Tokyo Stock Exchange, investors are eagerly watching to see if it will live up to the expectations set by recent market events. With the stock market soaring and interest rates at historic lows, this IPO has the potential to generate significant excitement and further boost Japan’s thriving IPO landscape.

(Note: $1 = 148.2900 yen)

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