Key facts
- Retail investors who bought Kioxia shares on margin may need to close positions by year-end.
- Kioxia shares have fallen significantly from their peak.
- The company posted record non-GAAP operating profit of JPY 1,326.2 billion in Q1 fiscal 2026.
- Kioxia is considering a US listing with American Depositary Receipts to raise at least USD 10 billion.
- A jury ordered Kioxia to pay $229 million for patent infringement.
- Kioxia announced a JPY 800 billion share buyback program.
Shares of Japanese chipmaker Kioxia Holdings have experienced a significant decline, leading to potential paper losses for retail investors who bought the stock on margin. These investors may be compelled to close their positions by the end of the year as the stock price has fallen from its peak.
Despite strong quarterly results, including a record non-GAAP operating profit of JPY 1,326.2 billion and a 415.5% year-on-year revenue surge in the first quarter of fiscal 2026, Kioxia's stock has been volatile. The average selling prices for NAND flash memory jumped 70%, contributing to the company's performance.
Kioxia is reportedly preparing for a US listing, potentially issuing American Depositary Receipts to raise at least USD 10 billion. Talks are underway with Bank of America, Goldman Sachs, and JPMorgan Chase for this strategic move, aimed at anchoring its valuation among global semiconductor leaders and accessing deep capital markets to finance significant manufacturing investments.
However, the company faces headwinds. A federal jury in Texas ruled on July 16 that Kioxia infringed a Viasat patent, ordering the payment of $229 million. Kioxia confirmed this verdict in early August. Additionally, while data center demand remains strong, the consumer segment of the semiconductor market shows weakness, and competitor capacity expansion poses a medium-term threat to margins.
In an effort to support its stock and reward shareholders, Kioxia announced a 3-for-1 stock split effective October 1 and a share buyback program of up to JPY 800 billion, running through the end of October.