SK Hynix Becomes Kioxia's Largest Shareholder with 14.19% Stake but Faces Control Hurdles
SK Hynix has become the largest shareholder of Japan's Kioxia, holding a 14.19% stake through investment vehicle SPC2 as of July 31, surpassing Toshiba's 14.12%. However, gaining control remains difficult due to Japanese regulatory approval requirements and investment agreement restrictions. In the first quarter of 2026, Samsung led the NAND flash market with 29% revenue share, followed by SK Hynix at 18% and Kioxia at 14%. SK Hynix invested about 3.9 trillion won (US$2.75 billion) in 2018 via Bain Capital vehicles. SK Group Chairman Chey Tae-won said on July 10 that no decision has been made on whether to sell the investment or use it strategically.
SK Hynix has become the largest shareholder of Japan's flash memory maker Kioxia through investment vehicle BCPE Pangea Cayman2 (SPC2). As of July 31, SPC2 held a 14.19% stake in Kioxia, while Toshiba's stake fell to 14.12% after selling some shares in the market, making SPC2 the top shareholder.
Despite becoming the largest shareholder, SK Hynix still faces multiple obstacles to gaining control. SPC2 must obtain prior approval from the Japanese government before converting bonds and acquiring voting rights.
The NAND flash memory market is highly competitive. In the first quarter of 2026, Samsung Electronics accounted for 29% of global NAND flash revenue, SK Hynix ranked second with 18%, and Kioxia third with 14%.
SPC2 was established by Bain Capital in 2018 to facilitate SK Hynix's entry into Kioxia's shareholder base. SK Hynix is the actual investor and holds effective control over the position. That year, SK Hynix invested approximately 3.9 trillion won (about US$2.75 billion) in Kioxia through two Bain Capital special purpose vehicles, with SPC1 investing 2.63 trillion won and SPC2 investing 1.3 trillion won. SPC1, led by Bain Capital, exited Kioxia in June 2026. SK Hynix did not disclose the profit from that investment, but it reported nearly 6.3 trillion won in investment asset gains in the second quarter, most of which were unrealized.
SK Group Chairman Chey Tae-won said on July 10 that a decision has not yet been made on whether to sell SK Hynix's investment in Kioxia or use it as a strategic bargaining chip.