[News] With Memory Market Recovering, Kioxia Has Reportedly Ceased Production Cuts and Secured Bank Lending

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According to a report from Nikkei, Japanese memory manufacturer Kioxia has ended production cuts amidst a recovery in the memory market and has secured new bank credit support. The company’s plants in Yokkaichi, Mie Prefecture, and Kitakami, Iwate Prefecture, have restored their production lines to 100% capacity, focusing mainly on NAND flash production.

With improved business conditions, creditor banks have reportedly agreed to refinance a maturing loan of JPY 540 billion (roughly USD 3.43 billion) and have established a new credit line totaling JPY 210 billion (roughly USD 1.33 billion).

Kioxia had previously implemented production cuts in October 2022 due to sluggish demand for smartphone products, reducing output by over 30%. The planned launch of new production lines at the Kitakami plant, originally scheduled for 2023, has been postponed to 2025.

The improved market environment is reflected in Kioxia’s financial report for January to March 2024, where the company achieved a net profit of JPY 10.3 billion, ending six consecutive quarters of losses. Demand for smartphone and personal computer chips has bottomed out and is starting to recover, while orders related to data centers have increased.

As per a previous TrendForce report, Kioxia’s Q1 output was still affected by production cuts from the previous quarter, resulting in a modest 7% QoQ increase in shipments. However, rising NAND Flash prices led to a 26.3% QoQ rise in revenue to $1.82 billion. Kioxia expects to grow Q2 revenue by approximately 20%, supported by increased supply bits and more flexible pricing, which will further expand enterprise SSD shipments.

Per the same report from Nikkei, led by a banking consortium including Sumitomo Mitsui Banking, Mitsubishi UFJ Financial Group, and Mizuho Bank, Kioxia’s improved performance has led to relaxed loan terms and agreement on refinancing along with new credit limits. Additionally, the banks will assist in funding for equipment upgrades.

Read more

• [News] Kioxia Optimistic about NAND Market Sentiment; Price Hike Expected in Q2
• [News] NAND Flash Market Landscape to Change?

(Photo credit: Kioxia)