According to a Reuters report on June 26th citing sources, with semiconductor market conditions rebounding and financial performance rapidly improving, NAND flash leader Kioxia is reportedly gearing up to file a preliminary application soon and aims to debut on the Tokyo Stock Exchange (TSE) through an initial public offering (IPO) by late October.

As per the same report citing sources, Kioxia plans to formally submit its IPO application by the end of August, aiming for a listing by late October. In order to meet the deadline, preparations are proceeding at a faster pace than usual for an IPO, although the timing may be subject to progress and could potentially be delayed until December. The sources further indicated that Bain Capital, a major shareholder of Kioxia, plans to sell part of its stake through the IPO to raise funds.

Kioxia previously obtained approval for listing on the Tokyo Stock Exchange in 2020 but postponed its IPO plans due to the US-China trade tensions and adverse market conditions. The source cited in the report mentioned that the funds raised through this IPO might be lower than its initial valuation in 2020.

Toshiba spun off its semiconductor business, which focused on NAND flash, in April 2017. The company is previously named “Toshiba Memory,” which was later renamed to “Kioxia” on October 1, 2019. Toshiba currently holds approximately 40% of Kioxia’s shares.

Previously on May 15th, the improved market environment is also 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.

This turnaround was driven by improved pricing due to production cuts across various NAND Flash manufacturers, which balanced supply and demand. The consolidated operating profit improved from a loss of JPY 171.4 billion in the same period last year to a profit of JPY 43.9 billion, marking the first quarterly profit in six quarters. Notably, the demand for smartphone and personal computer chips has bottomed out and is starting to recover, while orders related to data centers have increased.

Looking ahead to market trends and future prospects, Kioxia pointed out the normalization of customer inventory levels, which is expected to drive recovery in demand for PC and smartphone applications. They anticipate future growth driven by the introduction of On-Device AI, increasing memory capacities, and potential upgrades in PC operating systems stimulating replacement demand.

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• [News] With Memory Market Recovering, Kioxia Has Reportedly Ceased Production Cuts and Secured Bank Lending
• [News] Kioxia Optimistic about NAND Market Sentiment; Price Hike Expected in Q2

(Photo credit: Kioxia)

After ending production cuts amidst a recovery in the memory industry, Kioxia disclosed its plans on the 3D NAND roadmap last week. According to reports from PC Watch and Blocks & Files, Kioxia stated that achieving a 1,000-layer level by 2027 would be possible.

According to the reports, the number of 3D NAND layers has generally increased from 24 in 2014 to 238 in 2022, representing a tenfold rise over eight years. Kioxia stated that achieving a 1,000-layer level by 2027 would be possible at a rate of increase of 1.33 times per year.

The Japanese memory chipmaker seems to be more ambitious than Samsung regarding the battle of layers. In May, Samsung revealed its target to release advanced NAND chips with over 1000 layers by 2030. According to Wccftech, the South Korean memory giant plans to apply new ferroelectric materials on the manufacturing of NAND to achieve this goal.

According to the latest analysis from TrendForce, Kioxia has benefited from the recovery of the memory industry, recently receiving subsidies from the Japanese government and additional financing from a consortium of banks. Furthermore, the company plans to launch an IPO by the end of the year. These measures have provided Kioxia with ample financial resources to pursue technological advancements and cost optimization.

TrendForce further notes that Kioxia has ambitious plans to achieve 1000-layer technology by 2027, which is the highest number of layers announced by any manufacturer so far. However, to reach the milestone, it will be necessary to transition from TLC (3 bits per cell) to QLC (4 bits per cell), and possibly even to PLC (5 bits per cell). The technical challenges involved are significant, and whether Kioxia can achieve this market milestone by 2027 remains to be seen.

The Battle of Layers between Memory Giants

Kioxia and its partner Western Digital showcased their 218-layer technology in 2023 following the 162-layer milestone. Its current announcement to achieve the 1000-layer technology by 2027 would be a huge leap from that.

The battle of layers between memory giants has been intensifying as other memory heavyweights had already surpassed the 200-layer milestone. Earlier in April, Samsung confirmed that it has begun mass production for its one-terabit (Tb) triple-level cell (TLC) 9th-generation vertical NAND (V-NAND), with the number of layers reaching 290, according an earlier report by The Korea Economic Daily. For now, the company aims to stack V-NAND to over 1000 layers by 2030.

SK Hynix unveiled the world’s highest-layer 321-layer NAND flash memory samples in August 2023, claiming to have become the industry’s first company developing NAND flash memory with over 300 layers, with plans for mass production by 2025. Micron has also started to mass produce its 232-layer QLC NANDs in 2024.

Uncertainties behind Kioxia’s Optimism

However, to Kioxia, there are more challenges to overcome, as technological obstacles and Western Digital’s stance add uncertainties to its ambition. According to the report from Blocks & Files, increasing density in a 3D NAND die involves more than just adding layers, as each layer’s edge must be exposed for memory cell electrical connectivity. This results in a staircase-like profile, and as the number of layers grows, the die area needed for the staircase expands as well.

Therefore, to increase density, it is necessary to shrink the cell size both vertically and laterally, and to raise the bit level as well. All these scaling factors, including layer counts, vertical cell size reduction, lateral cell size reduction, and cell bit level increases, present their own technological challenges.

Moreover, according to Blocks & Files, WD has concerns regarding the manufacturing capital costs and the return on investment from selling chips and SSDs made with the fabricated NAND dies.

Citing Western Digital EVP Robert Soderbery in June, the report noted that in the 3D era, NAND manufacturing requires higher capital intensity but offers a lower cost reduction as bit density increases. The company even described the situation as the “end of the layers race,” indicating that there would be a slowdown in the rate of NAND layer count increases to optimize capital deployment.

How long would the battle of layers continue, and how far would it go? Technological breakthroughs as well as the willingness to endure higher capital intensity while the cost reduction being relatively limited may be key.

Read more

• [News] NAND Flash Market Competition Intensifies, as SK Hynix, Samsung Strive to Meet AI Demand
• [News] With Memory Market Recovering, Kioxia Has Reportedly Ceased Production Cuts and Secured Bank Lending

(Photo credit: Kioxia)

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)

Kioxia, one of the world’s major NAND manufacturer, anticipates a strong market outlook, emphasizing a full recovery this season in key NAND applications such as PCs and smartphones.

According to a report from the Economic Daily News, coupled with an expected surge in demand for new laptops and smartphones driven by AI, NAND chip prices, which increased by 20% last season, are likely to continue rising this season, marking the fourth consecutive price hike. The industry’s future appears quite promising.

Benefiting from the recovering NAND market, Kioxia reported its first revenue growth in seven quarters and profitability for the first time in six quarters. During an investor conference, Kioxia noted that NAND chip prices in US dollar rose by approximately 20% last season, continuing an upward trend for three consecutive quarters, with the company’s quarterly shipment volume increasing by about 5% to 9%.

Kioxia emphasized that this season sees a recovery trend in key NAND end applications such as PCs and smartphones. Additionally, a new wave of laptop and smartphone upgrades driven by AI is expected, along with data centers requiring higher-capacity solid-state drives (SSDs) to support AI applications. All these factors positively impact the NAND industry.

Kioxia is reportedly optimistic that the proliferation of AI and the increase in memory capacity will continue to drive long-term growth in the NAND market. Due to disciplined production output by NAND chip manufacturers, the price increase trend is expected to continue this season, making the industry’s future prospects quite optimistic.

Taiwanese NAND manufacturer ADATA believes that although upstream NAND suppliers are gradually returning to profitability and steadily increasing capacity utilization rates, their approach to pricing and capacity planning remains rational. Coupled with a noticeable recovery in demand for enterprise and data center SSDs, ADATA is reportedly optimistic that NAND chip prices will continue to rise in a stable manner, per the same report from Economic Daily News.

As per a research from TrendForce on March 6, in 4Q23, Samsung still firmly held the top position in the NAND Flash market, with its market share increasing from 31.4% in the previous quarter to 36.6%; SK Group, with its market share increasing from 20.2% in the previous quarter to 21.6%, stood in the second place quarterly revenue.

Following them were Western Digital, whose market share decreased from 16.9% in the previous quarter to 14.5%, Kioxia, whose market share decreased from 14.5% in the previous quarter to 12.6%, and Micron, whose market share decreased from 12.5% in the previous quarter to 9.9%.

Read more

• [News] Memory Giants Reportedly Increasing Prices, But Is the Market Outlook Truly Positive?
• [News] NAND Flash Market Landscape to Change?

(Photo credit: Kioxia)

According to industry sources cited in a report from Business Korea, Japanese NAND Flash supplier Kioxia is preparing to restart its merger plan with its partner Western Digital (WD). However, SK Hynix, a major shareholder and Korean memory giant, continues to firmly oppose the merger.

The same report citing industry sources also indicates that Kioxia could potentially go public on the Tokyo Stock Exchange as early as October 2024, according to its schedule. Kioxia’s major shareholder, Bain Capital, a U.S. private equity firm, has engaged its creditor banks to review the listing process, with the banks providing over JPY 1 trillion in loans to support this effort.

Despite facing losses of JPY 254 billion from the second to fourth quarters of 2023 and the impending repayment of a JPY 900 billion loan in June 2024, Kioxia has seen improved market conditions in the memory market, leading to higher market quotations and increased revenue to address these financial challenges. This resurgence has prompted Kioxia to restart its merger plans with WD, with the backing of creditor banks supporting this initiative.

However, SK Hynix, which indirectly holds a 15% stake in Kioxia through a KRW 4 trillion investment in Bain Capital, has explicitly stated its opposition to restarting the merger between Kioxia and Western Digital. A representative from SK Hynix cited by the report from Business Korea stated that their position against the merger of Kioxia and WD remains unchanged. However, they are open to discussing potential cooperation under conditions that protect their investment interests.

In 2023, Kioxia and Western Digital had drafted a merger agreement that was blocked due to opposition from SK Hynix. The same report, citing industry sources, suggests that SK Hynix is expected to continue opposing the merger of the two companies. SK Hynix intends to leverage its advantages in the normalization of the NAND Flash market to maximize the gap in market conditions between itself and Kioxia/ WD as much as possible.

For the NAND Flash market, TrendForce’s report in march has indicated that, as of the fourth quarter of 2023, SK Group captures the global market with a share of 21.6%, followed by WD (14.5%) and Kioxia (12.6%).

Read more

• [News] SK Hynix Rumored to Propose Collaboration with Kioxia for HBM Production in Japan
• NAND Flash Industry Revenue Grows 24.5% in Q4 2023, Expected to Increase Another 20% in Q1, Says TrendForce

(Photo credit: Western Digital)