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Kioxia Holdings called off plans to launch one of the biggest initial public offerings (IPOs) of the year.  The Japanese chip previously planned to go public on the Tokyo Stock Exchange on October 6. Bain Capital was leading Kioxia's IPO that could bring the Japanese chipmaker's valuation to $16 billion Kioxia's decision comes after revealing that its business has been adversely impacted by the United States' recent export restrictions on Chinese owned Huawei Technologies.

Kioxia points to stock market volatility and COVID-19 pandemic as reasons

In a statement on Monday, the Japanese chipmaker said it is suspending its IPO indefinitely and will continue to evaluate the appropriate timing for its market debut. Although the statement didn't mention Huawei directly, it's safe to assume that the delay can be attributed to an ongoing tech war between the Trump administration and Beijing. Kioxia attributed its decision to volatility within the stock market and the ongoing COVID-19 pandemic. “While we received significant interest from many investors, the lead underwriters and Kioxia do not believe it is in the best interest of current or prospective shareholders to proceed with the IPO at this time of continued market volatility and ongoing concerns about a second wave of the pandemic”, said Nobuo Hayasaka, President and Chief Executive Officer (CEO) of Kioxia. Hayasaka added, “As a company, we make disciplined decisions that are in the best interest of all our stakeholders and we will revisit an IPO at an appropriate time. We are not in a rush.”

Commerce Department imposed new licensing restrictions on Huawei

In August, the U.S. Department of Commerce announced new licensing restrictions targeting Chinese tech giant Huawei, forcing non-U.S. chip producers who utilize U.S. technology to receive approval before selling their products to Huawei. The move has effectively placed a stranglehold on the global chip market since the ultimate purpose of the sanctions is to hinder Chinese tech's growing influence. As a whole, this is all part of the Trump administration's ongoing battle with the Chinese government over issues of intellectual property theft, trade, and escalating tensions within the South China Sea. Experts have pointed out that the U.S. government's stance has wide ranging implications for firms across the globe in addition to Chinese and American firms. Whether the rules will remain in place after the November 2020 election remains to be seen. Presumably, a Biden/Harris victory could be a major game changer for firms like Kioxia, who have been an indirect casualty of the battle between the world's two largest economic superpowers.