Kokusai Electric, Layer by Layer

TYO:6525

Kokusai Electric makes the machines that deposit ultra-thin films onto silicon wafers, a step repeated dozens of times in every memory and logic chip. Spun out of Hitachi, bought by KKR in 2017 and listed in Tokyo in October 2023, it is one of the few Japanese toolmakers with a leading global share in its niche. This profile covers its technology, ownership history, numbers and what it means for overseas partners.

From Hitachi subsidiary to independent toolmaker

The company was the semiconductor equipment arm of Hitachi Kokusai Electric, part of the Hitachi group. In 2017 the US investment firm KKR bought Hitachi Kokusai Electric through a tender offer and separated the chip equipment business from the video and communications business. The equipment unit became Kokusai Electric, headquartered in Tokyo with its main manufacturing and development base in Toyama Prefecture.

KKR first tried to sell the business to Applied Materials. The deal, agreed in 2019 and later raised to about 3.5 billion US dollars, collapsed in 2021 after it failed to win Chinese antitrust approval. KKR then took the company public instead. Applied Materials kept a minority shareholding of around 15%, built through private placements before the listing.

What the machines do

Kokusai Electric specialises in batch deposition. Instead of processing one wafer at a time, its vertical furnaces treat around 100 wafers in a single run. This gives chipmakers high throughput and low cost per wafer for steps where uniform, high-quality films matter more than single-wafer flexibility.

• Batch ALD and CVD — Atomic layer deposition (ALD) and chemical vapour deposition (CVD) systems that build films a few atoms thick, used heavily in 3D NAND and DRAM.
• Treatment systems — Oxidation, annealing and other thermal steps in the same furnace platform.
• Single-wafer tools — A growing line for treatment and deposition steps where batch processing does not fit.
• Services — Upgrades, parts and maintenance for a large installed base of tools in customer fabs.

As 3D NAND stacks more layers and logic chips move to gate-all-around transistors, the number of deposition steps per wafer rises. That trend is the core of Kokusai Electric’s growth story.

The IPO and KKR’s exit

Kokusai Electric listed on the Prime Market of the Tokyo Stock Exchange on 25 October 2023 (ticker 6525), priced at 1,840 yen per share. The offering raised about 725 million US dollars, making it Japan’s largest IPO since 2018. KKR sold part of its stake in the offering, reducing it from about 73% to under 50%.

KKR continued to sell down in stages as the shares rose with the AI-driven chip cycle. In May 2026, Bloomberg reported that KKR was selling its remaining stake of about 10.6%, completing its exit roughly two and a half years after the listing.

The decline in the year to March 2026 reflected a normalisation of DRAM equipment sales to China after a period of heavy buying, and some shipments slipping into the next fiscal year. Service revenue grew strongly over the same period, which helped margins.

Why it matters for overseas partners

• A focused supplier — Kokusai Electric competes in a narrow segment against Tokyo Electron, but holds a strong position in batch ALD that few others match.
• Exposure to memory and advanced logic — Investors gain direct exposure to the rise in deposition steps driven by 3D NAND, high-bandwidth memory and new transistor structures.
• Service base — A large installed base gives it recurring revenue, and it partners with fabs worldwide on upgrades.
• Independent ownership — With KKR gone, the company is now a widely held listed firm, which simplifies partnership and supply agreements.

Outlook

Kokusai Electric’s results will follow the memory investment cycle, as they have since its Hitachi days. The longer-term direction is clearer: every new generation of chips needs more thin films, deposited more precisely. A company that once nearly disappeared into Applied Materials now stands on its own as one of Japan’s key chip equipment names.