Kioxia may have become Japan’s most valuable company amid the AI boom, but South Korea’s chip giants still hold a structural edge, according to the Bain Capital executive who led the company’s buyout from Toshiba.
“The reason South Korean companies are so successful in the semiconductor industry is the powerful top-down leadership and ownership structures of the chaebol conglomerates like Samsung and SK,” Yuji Sugimoto, Bain Capital’s Japan representative, told Nikkei in an interview published on Wednesday.
“In semiconductors, if you can’t commit, you fall behind and it’s game over. I think it’s difficult to manage that kind of business under the governance of large Japanese corporations,” he added to the media outlet.
Sugimoto led Bain’s acquisition of Toshiba Memory, which was spun off from Toshiba in 2017 before being bought by a Bain-led consortium for about 2 trillion yen in 2018. The company was renamed Kioxia the following year.
Sugimoto said Kioxia’s turnaround would not have been possible had it remained under Toshiba.
“It would have been impossible to keep making massive investments while also posting huge losses. Other divisions in the company would have opposed it,” he said.
Bain’s kept investing through the memory downturn even as Kioxia’s losses mounted, and the move ultimately paid off as AI-driven demand for memory chips transformed Kioxia’s fortunes.
“Back in 2018, the term ‘AI’ was not widely used, and we certainly didn’t foresee or fully understand the kind of demand we’re seeing today,” Sugimoto said.
Kioxia’s shares have risen more than 4,000% since its December 2024 listing.
Bain has since exited its investment, with Managing Partner David Gross telling Bloomberg Television on Thursday that the firm no longer holds a stake in Kioxia.
On Thursday, Kioxia’s shares were 8.5% higher by midday, helping the Nikkei 225 gain 2%.
South Korea’s Kospi was 1.7% lower as index heavyweight Samsung Electronics fell 2.3% while SK Hynix traded 2.3% higher.
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