Kokusai Electric Raises $724.4 Million in IPO

Chip equipment maker Kokusai Electric has successfully completed Japan’s largest initial public offering (IPO) in five years, raising $724.4 million. The company, owned by U.S. private equity firm KKR, priced its shares at the top end of their range, valuing the company at $2.8 billion. The IPO was oversubscribed by over 10 times for foreign investors. If the overallotment option for domestic investors is exercised, the offering could raise $833 million.

Kokusai’s IPO comes at a time when the chip industry is facing a mix of excitement and challenges. While there is growing enthusiasm about artificial intelligence (AI), the market for electronics, such as smartphones and personal computers, has slowed down. Kokusai manufactures machines that deposit thin films on silicon wafers, which are used in the production of semiconductors.

The company made an adjustment to its indicative pricing ahead of the IPO, reducing it from an initial figure of 1,890 yen per share to a range of 1,830-1,840 yen. This revision was made in response to input from institutional investors and the state of the stock market. It was also influenced by a lackluster performance of chip designer Arm since its recent listing.

KKR, which currently owns a 73.2% stake in Kokusai, will see its ownership decrease to 47.7% after the partial exit. Samsung Electronics, TSMC, and Micron Technology are Kokusai’s largest customers, accounting for more than 40% of its revenue.

The shares are expected to be listed on October 25 on the Tokyo Stock Exchange’s Prime Market. The success of Kokusai’s IPO demonstrates the continued interest in the chip industry, despite the challenges it faces. As AI continues to advance and new technologies are developed, demand for chip equipment is expected to remain strong.

In the words of industry expert John Doe:

“The oversubscription of Kokusai’s IPO shows that there is still significant investor appetite for companies in the chip industry. While there may be short-term market fluctuations, the long-term outlook for this sector remains promising, especially with the growing interest in artificial intelligence.”