The Japanese memory chipmaker, Kioxia Holdings, has made a significant move in the AI data center market with its latest flash memory product, coupled with strong statements from its CEO, which together have bolstered market confidence and triggered a sharp intraday reversal in its share price.
Kioxia Holdings announced on Thursday that it has begun sampling its tenth-generation BiCS FLASH 3D NAND chips to AI data center customers, with mass production scheduled to commence at its Kitakami plant in Japan in 2027. This represents the company's highest-specification flash memory product to date, offering approximately 60% higher storage density than its previous flagship and a data transfer rate of 4.8Gbps, a roughly 30% improvement over the prior generation.
At a media event, Kioxia's CEO, Hiroo Ota, explicitly stated, "We are not seeing any signs of weakening demand in data centers," and indicated the company would "firmly respond to market growth," suggesting a potential for further increases in capital expenditure. This direct commentary addresses market concerns about the sustainability of AI-driven storage demand.
Ota further noted that the rise of AI agents and the broader adoption of AI technologies, such as in robotics, will further expand the market opportunities for flash memory.
Catalyzed by the new product launch and the CEO's assertive comments, Kioxia's stock experienced a dramatic intraday turnaround, initially plunging over 12% before reversing sharply to close with a gain exceeding 10%. The stock has surged over 680% year-to-date, propelling the company's market capitalization to the upper ranks of Japanese listed firms.
Strategic Technical Differentiation Targets Hyperscale Data Centers
The new BiCS 10 chip being sampled utilizes a 332-layer stacking architecture and incorporates the company's proprietary CBA (CMOS directly Bonded Array) technology. It is a 1Tb TLC storage device intended for use in solid-state drives.
Notably, Kioxia has deliberately chosen a layer count that differentiates it from competitors. Atsushi Inoue, general manager of Kioxia's memory business unit, explained that when stacking exceeds 400 layers, the number of active memory layers during read/write operations increases, which can actually raise power consumption. Furthermore, thinner memory cell layers may reduce charge retention capability, potentially impacting long-term reliability.
Kioxia asserts that its 332-layer design, compared to solutions with over 400 layers, can reduce cost-per-gigabyte by about 10%, improve power efficiency by approximately 10%, and enhance memory cell reliability by around 35%. The continued application of CBA technology allows Kioxia to maintain a lead in interface speed. Since its introduction in the eighth generation, this technology has increased the interface rate from 3.6Gbps to 4.8Gbps, an advantage estimated to give Kioxia roughly a one-year lead over competitors in the technology roadmap.
The BiCS 10 chips will be produced at the second fab within Kioxia's Kitakami plant in Iwate Prefecture, which began operations last September.
Data Centers Represent a Crucial Growth Avenue Amid Market Share Pressure
Despite recognition of its technical capabilities, Kioxia's share of the data center NAND market lags significantly behind its South Korean rivals. Analyst Akira Minamikawa estimates that in 2025, Samsung Electronics Co Ltd will hold about 40% of the data center flash market, SK Hynix Inc around 30%, and Kioxia only about 10%.
The Korean firms benefit from their ability to bundle NAND memory chips with high-bandwidth memory (HBM) products, leveraging sales channels established through HBM business to offer one-stop solutions to hyperscale data center clients. Kioxia currently lacks an HBM product line, which somewhat constrains its penetration in this market.
However, Minamikawa offered a positive assessment of Kioxia's technical competitiveness, stating that its NAND chips are notably superior to competitors in data processing speed—a key metric for US hyperscale data centers—and that the tenth-generation chip represents a significant breakthrough in this area.
Industry Competition Intensifies as Rivals Ramp Up Production
As Kioxia advances its new product, its South Korean competitors are accelerating their own capacity expansion plans. SK Hynix Inc announced plans on July 2nd to invest a total of 100 trillion won in Cheongju, with 80 trillion won allocated for its M17 NAND production facility. CEO Kwak Noh-jung cited rapidly growing NAND demand amid tight supply, with construction on the M17 fab slated to begin next year for operation in the first half of 2029.
Meanwhile, Samsung Electronics Co Ltd is reportedly planning to build a new NAND production line at its Pyeongtaek campus P5 factory, with the cleanroom expected to be completed next year. If realized, this would mark Samsung's first major NAND capacity expansion since its P3 fab.
The simultaneous capacity expansions by these three major players have heightened market concerns over future supply-demand balance and price trends, which was also a key factor contributing to the recent pressure on Kioxia's share price.
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