[Edaily Reporter Lim Yukyung ] A special purpose company (SPC) in which SK hynix ( SK hynix(000660)) has invested has become the largest shareholder of Japanese NAND flash memory manufacturer Kioxia. As a result, SK hynix has effectively secured the position of Kioxia’s largest shareholder.

According to documents Kioxia submitted to the Tokyo Stock Exchange’s timely disclosure system on the 10th, Toshiba, Kioxia’s previous largest shareholder, reduced its stake from 14.48% (79,028,900 shares) to 14.12% (77,038,200 shares) as of the 3rd.

Bain SPC2, an investment vehicle of Bain Capital, maintained its 14.19% stake (77,400,000 shares) and surpassed Toshiba to become Kioxia’s largest shareholder. Since SK hynix holds convertible bonds (CBs) that grant it full voting rights over Bain SPC2, it has effectively secured the position of Kioxia’s largest shareholder.

SK hynix participated in a consortium led by Bain Capital in 2018 to acquire what was then Toshiba Memory (now Kioxia). SK hynix invested 395 billion yen in that special purpose company (SPC) in the form of convertible bonds (CBs). Under the terms of the agreement at the time, SK hynix pledged not to hold more than 15% of Kioxia’s voting rights until 2028, unless Kioxia separately consented.

However, Bain Capital sold off most of the stakes held by three of the four SPCs that owned Kioxia shares—excluding SPC2—by mid-June. Subsequently, as Toshiba continued to sell its Kioxia shares, SK hynix naturally became the largest shareholder without acquiring any additional shares.

However, this change in the largest shareholder does not mean that SK hynix will influence Kioxia’s management. Currently, SK hynix holds no voting rights; it must convert its convertible bonds (CBs) into shares—subject to approval from competition authorities in various countries—before becoming a shareholder with voting rights.

Kioxia appears to be keeping a close eye on SK hynix, a competitor in the NAND flash market, to prevent it from exercising its voting rights. In its annual report released last June, Kioxia explicitly stated that SK hynix’s holding of convertible bonds (CBs) that could grant it voting rights in Bain SPC2 constitutes a “risk factor with the potential for a conflict of interest.”

Meanwhile, Toshiba, which is aiming for a relisting, has been steadily selling off its stake in Kioxia. At the time of Kioxia’s initial public offering (IPO) late last year, Toshiba’s stake stood at approximately 40%. According to a large-shareholding report filed by Toshiba, its stake in Kioxia decreased from 18.52% at the end of March to 16.10% in May and further to 15.10% on July 15. Subsequently, through six on-market sales up to the 3rd of this month, Toshiba disposed of an additional 1 percentage point of its stake.

The market views this move by Toshiba—which is currently restructuring its business portfolio—as an effort to monetize its stake to fund growth investments and improve its financial structure. In fact, in its financial results for the fiscal year ending March 2026, Toshiba recorded 2.28 trillion yen in non-operating income from the sale of its Kioxia stake and related valuation gains. Net income reached a record high of 1.97 trillion yen, approximately seven times higher than the previous year. As Toshiba is pursuing a relisting in fiscal year 2028, there is speculation that it may continue to divest its stake in stages.