Kioxia anticipates demand for NAND storage will grow by roughly 20% each year as AI data center operators keep scaling up.
The Tokyo-based memory maker is confident that the market will sustain that rapid clip of expansion and is making investment decisions on a monthly basis to ensure its new plant is up to the task of filling the demand, Executive Vice President Tomoharu Watanabe said. Kioxia¡¯s specialty is in NAND flash memory, which is used everywhere from smartphones and laptops to the fast-access sections of data center operations.
¡°Demand is strong, especially from hyperscalers who need chips for generative AI purposes,¡± Watanabe said on Tuesday. ¡°We¡¯re also hearing from customers who need to replace data center servers they installed five to six years ago, as well as some saying they can¡¯t get enough hard drives.¡±
Alongside South Korean memory makers Samsung Electronics and SK Hynix, Kioxia has this year surged in value as investors look to find more beneficiaries of the artificial intelligence infrastructure boom. Its shares have more than tripled since its public debut in Tokyo in December.
The company this week began operations at the second fabrication facility of its Kitakami flash memory plant in Iwate Prefecture, where it plans to ship cutting-edge memory chips starting from the first half of next year.
Kioxia has been aggressively investing in its main chip factories in Kitakami and Mie Prefecture¡¯s Yokkaichi as it aims to close the gap to rivals Samsung and SK Hynix. The company plans to double the amount of memory it can produce at these factories within five years of its fiscal year 2024, which ended this March.
Memory chip prices are expected to bounce back gradually from a post-COVID-19 funk, as data center construction accelerates around the world. The NAND market, in particular, which has long suffered from slowing demand for smartphones and PCs as well as excessive inventories, is showing signs of recovery.
According to Taiwan-based research firm TrendForce, NAND flash prices in the October-December quarter are expected to rise 5% to 10% from the previous quarter.
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