Kioxia begins sampling next-gen flash memory for AI data centers

Kioxia Holdings Corp. has started shipping samples of its next-generation flash memory chips to AI data center operators, seeking to gain ground in the lucrative business against rivals.

The Tokyo-based chipmaker touted its latest high-density 3D flash memory chips with better efficiency and transmission speeds. The 332-layer 10th-generation chips can store 59% more data compared with its previous flagship 8th-generation chip, the company said.

Kioxia’s shares reversed double-digit percentage losses to rise 9.2% in Tokyo. On Friday, Chief Executive Officer Hiroo Ota said the company was prepared to spend more to expand capacity if needed, given it’s seen no signs of a slowdown in the torrid pace of growth in data center demand.

“We see absolutely nothing to signal any weakening in demand from data centers,” the CEO told reporters, government officials and bankers at a factory event in Kitakami, Iwate prefecture, northern Japan.

Production of the cutting-edge chips will take place at Kitakami’s second manufacturing facility, which began operating in September last year. US hyperscalers are also slated to tour the new facility next week.

Kioxia will increase production to meet expanding demand for flash memory with the rise of AI agents and the use of AI to operate robots and other machines, Ota said. “We will not hesitate to boost our capital spending plans if the market grows faster than expected,” he said.

The new product, which will be used in solid-state drives, is key for Kioxia’s bid to capitalize on soaring demand for AI data center storage and lower its reliance on products geared for smartphone manufacturers such as Apple Inc. Like its peers, the company seeks to break the memory sector’s brutal boom-and-bust cycles with technological breakthroughs and keep future price declines at bay.

Kioxia’s share in the NAND flash memory market for data centers trails South Korean companies, which can bundle storage chips with the high-bandwidth memory they supply. South Korea’s Samsung Electronics Co. held 40% and SK Hynix Inc. had 30% of the data-center flash market last year, helped by sales channels developed by their HBM operations, according to Omdia analyst Akira Minamikawa. Kioxia had 10%, he estimated.

“Kioxia’s NAND chips are highly superior to their rivals’ in terms of data processing speed, which is what’s most important for US hyperscalers,” Minamikawa said. “The newest 10th-generation chips are a big advance on that front, making them very competitive.”

Kioxia aims to get more than 60% of its revenue from data center chips by fiscal 2028.

The memory chip crunch has helped boost shares of the former unit of Toshiba Corp. almost 700% this year to become Japan’s biggest company in terms of the market value. But its stock has been whipsawed by persisting concerns over the strength of the AI rush and whether memory price rises are sustainable as manufacturers ratchet up supply.

Memory makers are securing growing volumes of binding multiyear contracts. That’s seen as an important first step to forecast demand correctly and make the right calls on capital spending. Kioxia’s flash memory used in smartphones and PCs also face rising competition from China’s Yangtze Memory Technologies Co. Bloomberg