Kioxia: Q2 Loss at 100.8 Billion Yen, NAND Prices Hit Bottom

Kioxia, a prominent Japanese manufacturer specializing in NAND flash memory, released its latest financial report on Tuesday, revealing a notable decline in profits attributed to diminished demand for storage chips used in smartphones and personal computers (PCs). The company reported a substantial 38% year-on-year decrease in consolidated revenue for the second quarter, amounting to 241.4 billion yen. Simultaneously, Kioxia recorded a net loss of 100.8 billion yen (approximately 48.48 billion RMB).

During the third quarter, Kioxia experienced a noteworthy shift from a positive consolidated net income of 34.8 billion yen in the same period the previous year to a loss of 86 billion yen. This marked the fourth consecutive quarter of financial losses. Examining data from the July to September timeframe over several years, the net loss figure reached its highest point since 2017.

Despite these third-quarter losses, Kioxia emphasized the positive impact of an enhanced supply-demand equilibrium and the depreciation of the Japanese yen. These factors contributed to an upswing in the selling price of NAND flash memory, resulting in a reduction of operating and net losses.

Since October 2022, Kioxia has undertaken a strategic 30% reduction in wafer production to counter the ongoing decline in storage chip prices. In the third quarter of 2023, the selling price of NAND flash memory increased by 5-9% compared to the second quarter, while shipment volume decreased by 10-14% sequentially. In U.S. dollar terms, NAND prices witnessed a moderate rise of 0-4%.

Ongoing production cuts by major players like Samsung and Kioxia, coupled with customers' inventory reduction initiatives, are gradually bringing the NAND market into a state of supply-demand equilibrium, fostering stability and a rebound in prices. Kioxia remains optimistic about the market's long-term growth trajectory and has outlined measures, including cost reduction in manufacturing, an evaluation of its product development portfolio, and an acceleration of research and development for key products.