kioxia

Japanese NAND flash memory manufacturer Kioxia Holdings saw its stock price drop by 15% on Monday. The company provided a guidance for operating profit of 2 trillion yen (approximately 12.7 billion USD) for the December quarter last Friday, which is below the consensus expectation of analysts at 2.35 trillion yen and only slightly higher than the 1.99 trillion yen recorded in the September quarter. In previous quarters, Kioxia's operating profit surged due to the procurement of high-speed NAND storage by artificial intelligence data centers.Kioxia attributed the slowdown in growth mainly to the timing of shipments rather than a weakening demand. Some orders originally scheduled for delivery this quarter were moved to the September quarter at the request of customers, while others were postponed to the March quarter next year due to an increase in the proportion of enterprise storage and longer production and delivery cycles. Chief Financial Officer Yoshihiko Kawamura stated in a conference call last week that the company expects to see a rapid recovery in growth in the March quarter, with demand from artificial intelligence data center operators remaining strong.Kawamura also mentioned that the company's planned production capacity for next year is already sold out, and more than half of the production for the following year has also been allocated. Some major customers have begun negotiations for contracts covering 2029 and beyond. Kioxia competes with Samsung Electronics, SK Hynix, and Micron Technology, focusing primarily on NAND, while its South Korean counterparts also sell DRAM needed for artificial intelligence computing.

According to Gate market data, Kioxia ADR plummeted 15%, with the third fiscal quarter performance outlook falling short of market expectations.

According to the Science and Technology Innovation Board Daily, NAND flash memory manufacturer Kioxia achieved revenue of 2.480 trillion yen in the second quarter of fiscal year 2026 (July to September), a quarter-on-quarter increase of 40.3%; operating profit was 1.995 trillion yen, a quarter-on-quarter increase of 57.1%. Kioxia expects a net profit of 3.56 trillion yen for the first nine months, a quarter-on-quarter increase of 61.0%.Kioxia expects operating profit of 2.00 trillion yen in the third quarter, while market expectations are for 2.35 trillion yen. The company will distribute an interim dividend of 90 yen per share. The company stated that the revenue growth is mainly due to strong demand from generative AI data center customers, which has significantly driven up the average selling price of products and increased bit shipments.

According to an exclusive report by the East Asia Daily on October 26, the memory chip company SK Hynix plans to return 80% of the proceeds from the sale of its stake in the Japanese NAND manufacturer Kioxia to shareholders as a special dividend. The report cites investment banks and financial industry sources estimating the related proceeds to be around 20 trillion Korean won, with the special dividend expected to be about 16 trillion Korean won. The company intends to announce this plan during the third-quarter earnings release on October 28. Currently, this is an industry expectation and not an officially confirmed announcement by the company.Based on the current number of shares issued, the special dividend amounts to approximately 23,000 Korean won per share, which is 15 times the annual fixed dividend of 1,500 Korean won per share and 61 times the quarterly dividend of 375 Korean won. Whether the payment will be made in installments is still under consideration. Last year's total dividend was 2.1 trillion Korean won. The company stated during the second-quarter earnings call that it is exploring various additional ways to return value to shareholders and will share the details once determined within the year.In 2018, SK Hynix participated in a consortium led by Bain Capital to acquire the NAND business spun off from Toshiba, which was renamed Kioxia in 2019. The total investment by the company was approximately 395 billion Japanese yen, of which the fund's contribution has been sold in phases by Bain and fully recovered. In the first quarter of this year, part of the disposal recovered 4.1178 trillion Korean won, and after further disposal in the second quarter, the estimated proceeds, excluding the principal, are around 20 trillion Korean won. Kioxia's stock price rose from about 10,000 Japanese yen at the end of last year to a historical high of 112,700 Japanese yen on June 22 this year.

According to Bloomberg, storage chip manufacturer Kioxia Holdings (TSE code 285A) is facing further downward pressure on its stock price. Investors previously borrowed funds to bet on a rise in the stock price and accumulated positions, which may now need to be sold at a loss.As of October 15, the company's outstanding leveraged long positions amount to approximately 920 billion yen (5.8 billion USD), the largest among all listed companies on the Tokyo Stock Exchange, according to data from the exchange. Trading activity has decreased as the stock price has fallen, with transaction volume dropping by 84% from its peak, falling to 766 billion yen on Friday, and some credit traders face the risk of being forced to close positions at prices below their purchase price.

According to a report by South Korea's Small and Medium Business News on September 28, industry insiders stated that SK Hynix has initiated the foundational engineering required for establishing a semiconductor factory in the Tohoku region of Japan. One insider mentioned that it is still unclear whether the project will be an independent factory or a joint venture with Kioxia, but local groundwork is underway, and SK Hynix has also requested domestic component suppliers in South Korea to expand their supply.The report noted that as of a month ago, SK Hynix's stance on building a memory semiconductor factory in Japan was still "under research," and they stated that "there are no specific decisions." In response to this news, SK Hynix indicated that the Japanese memory semiconductor factory is still in the research phase, with no further advancements at this time.The report also mentioned that SK Group Chairman Chey Tae-won stated in August this year that they are studying the establishment of a joint venture memory semiconductor factory in Japan, with the Tohoku region subsequently seen as a strong candidate. The Tohoku region of Japan and Iwate Prefecture have gathered semiconductor and material component companies such as Kioxia's Kitakami factory, Japan Semiconductor, Ancor Technology, Denso, and Tokyo Electron.

Market news: Japanese NAND giant Kioxia Holdings is considering raising $10 billion through an IPO in the United States.The company is in talks with Bank of America, Goldman Sachs, and JPMorgan Chase to seek more liquidity in the U.S.

According to Bloomberg, the top executive of Kioxia Holdings denied the possibility of establishing closer cooperation with competitors and shareholder SK Hynix, stating that they will control the rapid rise in storage chip prices to avoid impacting long-term demand in the artificial intelligence sector.Currently, storage chip manufacturers are expanding production capacity to meet the surge in orders from artificial intelligence service providers, leading to a significant increase in related chip prices. Some investors believe that forming manufacturing partnerships may help reduce the risk of large-scale capital expenditures.

SK Hynix CEO Kwak Noh-Jung stated that the company is exploring ways to deepen cooperation with Japanese memory chip customers and suppliers, and is cautiously assessing how to jointly develop the NAND flash memory market. Regarding the company's significant indirect stake in Kioxia, he mentioned that there are currently "no definite plans."After Toshiba's recent divestment, SK Hynix's investment vehicle BCPE Pangea Cayman2 has become Kioxia's largest shareholder, holding a 14.19% stake. SK Hynix holds bonds that can be converted into nearly all voting rights of this investment vehicle; according to a previous agreement, its voting rights cannot exceed 15% before 2028 without Kioxia's consent.In addition, SK Hynix is investing over $4 billion to build its first U.S. HBM packaging facility in Indiana. The cleanroom of the factory is expected to be operational by October 2028, with mass production of the next generation HBM planned for the second half of 2029, and it is expected to employ about 1,000 people once fully operational. The company is also still evaluating the possibility of listing its U.S. NAND subsidiary Solidigm, but no decision has been made yet.

According to Nikkei Asia, storage chip manufacturer Kioxia Holdings plans to build new production facilities at its factory in northern Japan, with project investments expected to exceed 1 trillion yen (approximately 6.27 billion USD).Kioxia currently ranks third in the global NAND flash memory market, behind Samsung Electronics and SK Hynix. The company's move aims to follow its South Korean competitors in increasing production capacity to meet market demand.

According to Nikkei News, the largest shareholder of the Japanese NAND manufacturer Kioxia has changed from Toshiba to the special purpose company BCPE Pangea Cayman 2 (SPC2), which holds 14.19% of Kioxia's shares, slightly higher than Toshiba's reduced stake of 14.06%. SPC2 is the entity through which SK Hynix invested via convertible bonds (CB).From July 15 to August 3, Toshiba reduced its stake in Kioxia in seven transactions, decreasing its holding from 15.10% to 14.06%. In 2018, SK Hynix invested approximately 40 trillion won in Kioxia through two SPCs, one of which, SPC1, co-funded with Bain Capital, completed its share sale when Bain Capital exited in June this year, while SPC2, which was solely funded by SK Hynix with about 13 trillion won, continues to hold its shares. If the CB is converted into stock, SK Hynix will gain voting rights. However, industry assessments suggest that the actual impact on Kioxia's operations is likely low, as exercising voting rights requires approval from various countries' competition and antitrust authorities. The Japanese government may not easily approve this due to considerations for protecting its domestic semiconductor supply chain. Kioxia is currently the third-largest NAND manufacturer in the world, following Samsung Electronics and SK Hynix.

Japanese NAND manufacturer Kioxia is accelerating its layout in the AI NAND market. This year, it has launched mass production of the 10th generation (BiCS 10) 332-layer 3D NAND and based on this, introduced the PCIe 6.0 supported data center eSSD "CM10," which has improved sequential read performance by up to 92% compared to the previous generation. In addition, Kioxia plans to start mass production of UFS 5.0 embedded storage by the end of this year, with data transfer speeds approximately doubling compared to UFS 4.1, primarily targeting the AI mobile device market. According to TrendForce data, Kioxia's global NAND market share in the first quarter of this year was 13.9%, ranking third, following Samsung Electronics (31.6%) and SK Hynix (17.6%).Korean manufacturers are also quickening their pace. Samsung has begun mass production of the PCIe 6.0 eSSD "PM1763" last month, equipped with the 9th generation V-NAND and a 4nm controller, with plans to mass produce UFS 5.0 in the fourth quarter. Samsung also announced that it will start mass production of the 10th generation V-NAND (approximately 430 layers) this month, applying hybrid bonding and triple stacking technology for the first time. Industry analysts believe that Kioxia is quite competitive in terms of the speed of technological iteration, but its production capacity still lags behind Korean manufacturers, and competition in the AI storage market will become even more intense in the future.

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