NAND Supply Tightens, Kioxia Eyes New Fab

According to Nikkei, Japanese NAND flash memory leader Kioxia is evaluating the construction of a new fabrication facility to meet rapidly growing market demand, particularly driven by artificial intelligence (AI) data center expansion.

Following the report, Kioxia’s shares surged more than 7% intraday on June 3, hitting a fresh all-time high. Its market capitalization briefly exceeded that of Toyota Motor Corporation. Year-to-date, Kioxia’s stock price has skyrocketed by approximately 660%, reflecting strong investor expectations for sustained memory demand growth.

During a corporate briefing held on June 2, Kioxia President Yukio Ota stated that the company has begun evaluating the construction of a new plant at its Kitakami site in Japan. The proposed expansion is targeted for completion and potential production start after 2029–2030, depending on market conditions. The company currently operates NAND flash production at its Yokkaichi and Kitakami facilities, with two fabrication buildings already in place at Kitakami.

Ota emphasized that demand from AI-driven data centers is expanding sharply, noting that the NAND flash market is expected to remain tight through at least 2027.

Kioxia also outlined a significant capital expenditure plan, projecting approximately ¥450 billion in capital investment for fiscal 2026 (April 2026–March 2027). The company further indicated that average annual capital spending from FY2026 to FY2028 is expected to reach around ¥470 billion, signaling a long-term commitment to capacity expansion.

As AI workloads accelerate storage requirements, industry demand for NAND flash continues to rise. Kioxia warned that existing capacity may become insufficient beyond 2029 if demand trends persist, reinforcing the need for new production facilities aligned with future market growth.

In its earnings update released on May 15, Kioxia projected explosive growth driven by AI adoption and data center demand. For the April–June 2026 quarter, the company expects consolidated revenue to surge 410% year-on-year to ¥1.75 trillion, operating profit to increase nearly 28 times (2,791%), and net profit to rise about 46 times (4,649%), all reaching record highs.

Looking ahead, Kioxia forecasts NAND flash bit growth of 15–19% in 2026 and expects the market to remain supply-constrained in 2027, underscoring continued strength in memory demand tied to AI infrastructure expansion.