In a remarkable financial milestone, Kokusai Electric, a Japanese leader in the development of tools for semiconductor manufacturing, made its debut on the Tokyo Stock Exchange with the most substantial initial public offering (IPO) in Japan since 2018. This notable event signaled the strength of Japan’s financial market and the semiconductor industry.
The value of Kokusai Electric’s listing was set at a minimum of 108 billion yen (equivalent to approximately USD 721 million). The IPO saw its parent company, KKR, a prominent US-based investment firm, offering 58.8 million of Kokusai Electric’s shares at an initial offering price of 1,840 yen per share.
On the morning of the IPO, Kokusai Electric’s shares were actively traded at 2,281 yen, marking a remarkable 24% increase from the initial offering price. This surge in share value underscores the high demand and investor confidence in the company.
This landmark IPO surpasses Japan’s most extensive share offering since 2018 when SoftBank Corp listed shares valued at 2.65 trillion yen.
IPO Success Amid Industry Momentum
Kokusai Electric’s successful IPO aligns with a broader trend in the industry. According to Bloomberg, IPO proceeds for the year have tripled in comparison to the same period in 2022. This substantial growth reflects the strong investor interest in the semiconductor sector and related industries.
KKR’s Strategic Investment
In 2018, KKR acquired Kokusai Electric for approximately 260 billion yen, as it was transitioning from its former status as a subsidiary of the Japanese engineering conglomerate Hitachi. This strategic investment has now culminated in Kokusai Electric’s impressive IPO, solidifying its position as a prominent player in the semiconductor tool manufacturing sector.
Navigating Export Regulations
The timing of Kokusai Electric’s IPO coincides with Japan’s efforts to follow the United States in tightening regulations on exports of semiconductor-related products to China. This move is part of a broader international effort to address concerns regarding the export of sensitive technology and safeguard intellectual property.
Notably, the list of regulated products includes machines for deposition and heat treatment, key components of semiconductor manufacturing. For Kokusai Electric, this development could potentially impact its business, as approximately 34% of its sales are derived from China, as reported by Bloomberg.
Failed Acquisition Attempts
KKR had previously sought to sell Kokusai Electric to a US-based semiconductor company, Applied Materials. However, this attempted sale faced opposition from Chinese antitrust authorities, leading to its abandonment in 2021.
Kokusai Electric’s IPO marks a significant milestone in its corporate journey and the semiconductor industry, emphasizing Japan’s commitment to maintaining a strong presence in this critical sector. The company’s robust debut highlights the demand for technology and tools that underpin the semiconductor manufacturing process, which plays a pivotal role in various industries, including electronics, telecommunications, and beyond.
