SK hynix Becomes De Facto Largest Shareholder of Japan's NAND Maker KIOXIA

An investment vehicle with equity rights held by SK hynix has become the largest shareholder in Japanese NAND flash maker KIOXIA Corporation. SK hynix does not directly own KIOXIA shares, but its indirect influence over the company, a major competitor in the global NAND market, is drawing renewed attention.
KIOXIA said on the 11th that the stake held by its former parent, Toshiba Corporation, had fallen to about 14.12% as of the 3rd, from 14.48% previously. As a result, the investment vehicle BCPE Pangea Cayman2 Limited, established by Bain Capital, overtook Toshiba as KIOXIA's largest shareholder with a 14.19% stake.
BCPE Pangea Cayman2 Limited is closely linked to SK hynix. According to KIOXIA's annual report, SK hynix holds bonds that can be converted into voting rights in the company. That does not mean SK hynix directly owns a 14.19% stake in KIOXIA. KIOXIA also describes those rights as a risk factor with a potential conflict of interest.
The relationship between SK hynix and KIOXIA dates back to 2018. At the time, SK hynix joined a Bain Capital-led consortium and invested in the acquisition of KIOXIA, then Toshiba's memory business. SK hynix agreed to keep its voting stake in KIOXIA at 15% or less through 2028 unless KIOXIA allows a higher level. The structure lets SK hynix invest in a rival while placing certain limits on direct management involvement.
KIOXIA is one of the world's leading NAND makers, competing with Samsung Electronics and SK hynix. SK hynix also owns Solidigm, a subsidiary launched after it acquired Intel's NAND and solid-state drive business in 2021, putting it in direct competition with KIOXIA in the global NAND market.
Even so, the NAND industry requires massive capital investment and its profitability can swing sharply depending on market conditions, so the possibility of alliances among companies has long been a topic of discussion. KIOXIA itself has also drawn market attention over the possibility of business integration with other NAND makers. With an SK hynix-linked investment vehicle now becoming the largest shareholder, attention is likely to grow over SK hynix's role in any future changes to KIOXIA's governance structure.
The key point to watch is 2028. That is when the period for SK hynix's pledged 15% cap on voting rights ends, making its future capital relationship with KIOXIA a variable. However, analysts say whether voting rights are actually expanded or management participation increases will depend on agreements with KIOXIA and the judgments of competition authorities in each country.
Meanwhile, Toshiba has been gradually selling down its stake in KIOXIA to recover its investment since KIOXIA's listing in 2024. In particular, KIOXIA's share price has risen sharply on expectations of stronger demand for memory used in AI data centers, creating a favorable environment for cashing out.
[email protected] Kim Kyung-min Reporter