While competitors like Samsung Electronics, SK Hynix, and Micron Technology are intensely competing for the high-bandwidth memory (HBM) market, Japanese NAND flash manufacturer Kioxia sees an opportunity to capture growth in the high-density storage segment for AI data centers. Kioxia's Executive Chairman, Stacy Smith, stated that these rivals are not aggressively investing in expanding capacity for solid-state drives and other advanced NAND storage products, which are precisely what cloud service providers need to meet AI's data demands. "We have the right product leadership in these segments at the right time," he remarked in an interview.
Smith indicated that Kioxia aims to increase its production capacity at a rate "slightly faster" than the overall bit growth rate—estimated at around 20% this year—to help the flash memory manufacturer gain market share. This expansion will largely proceed under new leadership announced this week, with 63-year-old Executive Vice President Hiroshi Ohta taking over as CEO, succeeding the 70-year-old Nobuo Hayasaka.
Bryan Ao, a memory analyst at TrendForce, noted that manufacturers' cautious pace of NAND capacity expansion over the past few years implies that flash memory supply will remain tight until at least 2027. This suggests that flash memory prices will continue to receive significant support for some time.
Meanwhile, Kioxia's stock closed nearly 11% higher on Friday, driven by investor expectations that an extended collaboration with SanDisk will boost cash flow and fuel a recovery after years of austerity. Kioxia and SanDisk announced on Friday that they had agreed to extend their long-term cooperation agreement for Kioxia's Yokkaichi Plant in Japan, moving the expiration date from the end of 2029 to the end of 2034.
Under the renewed agreement, SanDisk will pay Kioxia a total of $1.165 billion in manufacturing service fees to ensure a stable and continuous supply of flash memory products over the next five years. The payments will be made in stages, scheduled for completion between 2026 and 2029. Furthermore, both parties reaffirmed their commitment to continuing their tradition of technical collaboration, jointly investing resources to develop next-generation 3D flash memory technology to meet the urgent demand for high-performance storage solutions in high-growth areas like AI, data centers, and the Internet of Things.
The partnership between Kioxia and SanDisk began in 2014, with the Yokkaichi Plant serving as a core jointly-operated production base for the research, development, and mass production of advanced process flash memory chips. Analyst Jake Silverman commented, "SanDisk's third-quarter profit guidance is 163% higher than expected, reflecting the sustained upward trend in NAND prices since last October. This has driven gross margins well above the peaks of previous cycles. The lack of meaningful capacity additions over the next 1-2 years indicates that NAND prices still have room to rise further, supported by strong AI inference demand, as larger models and improved inference capabilities drive the need for higher storage density."
Data shows that AI's seemingly "insatiable" demand for data storage has driven Kioxia's stock price up approximately 105% year-to-date. Since its IPO in December 2024, the Japanese NAND flash manufacturer's shares have surged nearly 1,400%, and its roughly 540% gain in 2025 made it the best-performing stock that year on the Tokyo Stock Exchange's Prime Market.
AI's demand for high-performance storage makes Kioxia's leadership in NAND bit density particularly critical. NAND is the memory used in smartphones, automobiles, and servers to store data without requiring power. Hyperscale data centers seeking energy-efficient storage solutions are increasingly exploring NAND-based options, thereby enhancing Kioxia's pricing power. This is a significant positive for Kioxia, as investors anticipate that robust storage demand and rising prices will boost its revenue.
Amir Anvarzadeh, Japan equity strategist at Asymmetric Advisors Pte., stated, "In the tech sector, our primary focus heading into 2026 is on memory, whether through direct investment in Kioxia or other derivatives." He added that, given that storage demand still far outpaces supply, Kioxia appears well-positioned to handle potential market turbulence in 2026. "Concerns about a slowdown in data center investment should not actually impact the next phase of memory prices because the market is already severely undersupplied."