Kioxia Earnings Miss, Shares Plunge 23%

On November 13, Kioxia released its financial results for the second quarter of FY2025 (ending September 30, 2025). Despite the global NAND Flash shortage and rising prices that have boosted many memory manufacturers this year, Kioxia's performance came in below expectations—along with a softer outlook for the next quarter.

During Tokyo trading on November 13, Kioxia's share price slipped 1.62%. The weaker-than-expected earnings also triggered declines among international peers, with Seagate down 7.31%, Western Digital down 5.29%, and Micron down 3.25%. By the morning of November 14, Kioxia's stock had plunged 23.03%.

According to the report, Q2 revenue reached 448.346 billion yen, down 6.8% YoY but up 30.8% QoQ—slightly above the midpoint of its previous guidance. Growth was driven mainly by higher shipment volumes: bit shipments rose nearly 40% QoQ, while ASP in USD slipped slightly QoQ (though comparable-product ASP rose modestly).

Operating profit came in at 87 billion yen, falling short of the market's 96–100 billion yen expectation.

For Q3 FY2025, Kioxia expects revenue of 500–550 billion yen and operating profit of 100–140 billion yen—again below the broader market forecast of 141–150 billion yen.

The main drag on performance came from a weaker product mix. Seasonal smartphone demand pushed up shipments of lower-margin "smart device" products, which surged 99% QoQ and climbed to 35% of revenue. This shift caused overall ASP to fall by low single digits QoQ. Excluding mix effects, comparable-product ASP actually increased by mid single digits.

Industry watchers believe Kioxia may have been constrained by a fixed-price agreement for mobile NAND supplied to Apple. With spot prices climbing sharply, this pricing mechanism prevented the company from benefiting fully from the market uptrend.

Kioxia, however, remains optimistic. Strong AI-driven demand—supported by server upgrades, growing eSSD inference workloads, and ongoing NL-HDD shortages—continues to keep the memory market tight. For bit growth, the company expects high-teen (17–19%) expansion in 2026, in line with TrendForce projections.

With supply conditions extremely tight, Kioxia has already begun early contract discussions with some customers for 2027 and beyond. The company also plans to maintain its investment cycle and accelerate development of next-generation BiCS technologies, including G8 and G10.