A KRW 3.9 trillion conviction bet from 2018 has turned into a 25x return — the AI NAND super-cycle has handed SK hynix a face-saving exit.
In 2018, when SK hynix invested JPY 395 billion (about KRW 3.9 trillion) in Kioxia (the former Toshiba Memory unit) through a Bain Capital-led consortium, most of the company's executives opposed the deal. Chairman Chey Tae-won pushed it through. For the next several years, Kioxia's share price languished and SK hynix booked trillions of won in mark-downs.
Eight years later, the loss is gone. Kioxia listed on the Tokyo Stock Exchange in December 2024 at an IPO price of JPY 1,455. By April 29, 2026, it traded at JPY 37,560 — roughly 25 times the IPO price.
The structure — fund LP plus convertible bond
SK hynix's investment had two legs. JPY 266 billion was committed as a limited partner (LP) into a fund managed by Bain Capital. A separate JPY 129 billion was invested via a convertible bond (CB), convertible into 77.4 million common shares — a roughly 14.4% stake.
The LP portion tracks the fund's NAV; the CB portion is directly linked to Kioxia's share price. The 25x markup has produced its biggest dollar effect on the CB leg.
What lit the fuse — AI data center NAND demand
The catalyst is AI data center NAND demand. Kioxia has officially confirmed that its full 2026 NAND production capacity is already sold out. FY25 Q3 (October–December 2025) revenue hit a record JPY 543.6 billion, with operating profit guided to JPY 709.6–799.6 billion — well above the JPY 525.5 billion consensus.
The drivers are stacked: rising LLM inference workloads, a wave of legacy server replacements, and a shortage of nearline HDDs that has pushed customers toward high-capacity QLC SSDs. Net income for the fiscal year ending March 2027 is now expected to grow more than fourfold year-on-year.
Price timeline — 26x in eight months from listing
• Dec 2024 IPO — JPY 1,455
• Apr 2025 — JPY 1,510 (post-IPO drift)
• Sep 2025 — JPY 3,485 (+112% YTD)
• Jan 2026 — JPY 15,205 (10x IPO)
• Feb 2026 — JPY 24,420 (record after earnings beat)
• Apr 8, 2026 — JPY 27,310 (+17% on dividend report)
• Apr 10, 2026 — JPY 31,140 (+8.81%)
• Apr 29, 2026 — JPY 37,560 (~25x IPO)
External view — a "face-saving exit"
Reuters Breakingviews titled a January 2026 piece, "Kioxia's surge offers SK hynix a face-saving exit." Seven painful years of holding finally delivered a 10-bagger; the moment to monetize was arriving.
As Kioxia turns net-cash positive in mid-2026, shareholder returns are likely to come into serious consideration.
Morgan Stanley analyst
SK hynix's quiet monetization — the KRW 951 billion signal
SK hynix has already begun monetizing. Long-term investment asset disposals totaled KRW 951 billion in 2025. With the prior-year comparison at just KRW 479 million, that is effectively a vertical rise from zero.
On a standalone basis, the book value of long-term investment assets stood at KRW 14.29 trillion at year-end — up 292% YoY. The Kioxia stake is presumed to make up the bulk of that change.
With tens of trillions of won in capex planned for this year, the market is watching for further disposals. At the same time, SK hynix wants to retain strategic influence in the NAND market as a key Kioxia shareholder — and that holds back any rush to sell.
Next checkpoint — full-year results on May 15
Kioxia's FY25 full-year results are scheduled for May 15, 2026. The annual numbers — and any formal dividend policy — will set the short-term direction. A dividend means SK hynix can pull cash without selling, easing pressure to monetize. No dividend, and the incentive to sell only grows.
One thing is clear. The decision almost everyone in the market opposed in 2018 has become the brightest asset on SK hynix's 2026 balance sheet.
