Listing of Kioxia: Strengthen semiconductor production base

Editorial

16:01 JST, December 25, 2024

It is important to strengthen Japan’s economic competitiveness by building up its domestic production base for a wide variety of semiconductor goods.

It is hoped that the listing of major semiconductor company Kioxia Holdings Corp. will lead to the revival of the nation’s semiconductor industry as a whole.

Kioxia Holdings has listed its shares on the Prime section of the Tokyo Stock Exchange. The stock prices have shifted to a higher level than at the time of the initial public offering, with a total market value of more than ¥800 billion, attracting investors’ attention.

Kioxia produces NAND-type memory semiconductors that are used in personal computers and smartphones, and the company holds the third-largest share of the global market.

The semiconductor industry is said to require continued massive investment due to rapid technological progress. The listing will make it easier for Kioxia to raise funds for capital investment as well as research and development. It is important to make investment decisions quickly so the company can survive the fierce competition.

Kioxia was established as a spin-off from Toshiba Corp., which had been experiencing a management crisis, with the intention of selling its semiconductor business. Kioxia’s listing has been postponed several times due to deteriorating market conditions and other factors.

Kioxia may need to use the listing as an opportunity to map out its growth strategy again. This is because it has been pointed out that the company’s sole focus on NAND-type memory production has made it vulnerable to changes in market conditions and has raised doubts about its growth potential as well.

It is desirable that the manufacturing industry is a key sector that supports Japan’s economy, as it is highly effective in creating jobs. The reality, however, is the nation’s economy is more dependent on the automobile industry alone. Therefore, it is significant to develop the semiconductor sector as another core of the Japanese economy.

Japanese companies dominated the global semiconductor market in the late 1980s, but their presence has declined significantly since then. Nevertheless, they still have strengths in production equipment and materials.

In Japan, moves have been underway to regain lost ground. Taiwan Semiconductor Manufacturing Co. makes cutting-edge products in Kumamoto Prefecture. Rapidus Corp., which aims to produce next-generation products, plans to operate lines for prototypes in Hokkaido in the spring of 2025.

The production of semiconductors is expected to grow, including those for generative artificial intelligence. If related industries are vitalized through the strengthening of the nation’s production base, job creation and human resources development can be expected.

Semiconductors are a promising field in which Japan should deepen cooperation with the incoming administration of U.S. President-elect Donald Trump. This is because Kioxia is producing semiconductors jointly with a U.S. company, and IBM Corp. of the United States is also offering technologies to Rapidus.

In addition, Japanese companies have a certain share of the global market for power semiconductors that control electric power. However, each company’s market share is small, so reorganization within the industry would be a leading option to increase competitiveness.

(From The Yomiuri Shimbun, Dec. 25, 2024)