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Kioxia Shares Plunge Over 16% After U.S. Patent Verdict, Chip Sector Selloff
Shares of Japanese memory chip manufacturer Kioxia plummeted more than 16% to close out the week on Friday, driven by an adverse U.S. patent infringement verdict and a wider selloff in the semiconductor sector.
Patent Infringement Ruling
The company announced on Thursday that a U.S. jury found it liable for patent infringement in a case originally filed in November 2021. The jury awarded damages totaling $229 million (¥37.1 billion) to the plaintiff.
Kioxia stated that it maintains it has not infringed on any patents and plans to pursue all available legal remedies, including an appeal. The company added that it does not anticipate a business impact even if the verdict is ultimately upheld.
AdMarket Impact and Analyst View
The steep decline in Kioxia's stock was exacerbated by broader selling pressure on chip stocks during Friday's trading session. The dual headwinds of company-specific legal news and negative sector sentiment weighed heavily on investor confidence.
Analysts at Citi, in a note to clients, said they believe the financial impact will be limited given Kioxia's current profit levels. They suggested the company may post litigation provisions for the damages in the first quarter of its fiscal year ending March 2027, noting that no provisions for this specific case had been made previously.
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