NAND Prices Up 15%, Kioxia Hits Record High Profits!

On August 8th, Kioxia, Japan's leading NAND Flash manufacturer, announced its financial results for the first quarter of FY2024 (April to June). The company achieved a remarkable consolidated revenue of 428.5 billion yen, marking a 71% increase year-on-year and a 106.4% rise quarter-on-quarter. This performance represents Kioxia's second consecutive quarter of growth and sets a new record for quarterly revenue.

The surge in revenue is attributed to the recovery in NAND Flash demand, which led to continuous price increases. Additionally, the weakened yen further amplified the revenue gains. Kioxia also reported a significant turnaround in operating profit, shifting from a loss of 130.8 billion yen in the same period last year to a profit of 125.9 billion yen this quarter. The company’s consolidated net profit also saw a dramatic improvement, moving from a loss of 103.1 billion yen last year to a profit of 69.8 billion yen, achieving record-breaking results for the second consecutive quarter.

Kioxia highlighted that NAND Flash prices (in yen) increased by approximately 20% compared to the previous quarter, marking the fourth consecutive quarter of price growth. Shipment volumes also rose by 10-14% quarter-on-quarter, and prices in USD increased by about 15%.

In response to previous downturns in the memory market, Kioxia had been reducing production since October 2022, with cuts exceeding 30% at one point. However, due to the recent recovery in market demand, Kioxia ended production cuts in June 2024, with capacity utilization now back to 100%.

Looking forward, Kioxia noted that with the normalization of customer inventories and a recovery in demand, the supply-demand balance is nearing stability. While PC demand remains weak, smartphone demand is gradually recovering. Kioxia also anticipates that the rise of On-Device AI, increased storage capacity, and PC operating system updates will drive future demand.

The company remains optimistic about the long-term growth of the NAND Flash market, driven by the expansion of AI and increasing memory requirements. Kioxia aims to maintain efficient operations by aligning production levels with demand and carefully managing marketing expenses and production costs.