Kioxia and Sandisk Announce $31.4 Billion Investment to Scale AI Chip Production in Japan

Kioxia, Sandisk plan $31.4 billion Japan investment to boost AI chip output

Kioxia and Sandisk will invest over $31.4 billion to increase chip production. This significant investment will occur over the next six years in Japan. A new facility in Kitakami will produce high-density 3D flash memory chips. These chips are essential for managing massive artificial intelligence workloads. The move aims to ease global shortages and reduce electronics costs. Kioxia Holdings and Sandisk plan to spend more than $31.4 billion to ratchet up production capacity in Japan, boosting output of a critical AI data centre component. The Tokyo-based maker of NAND flash memory aims to invest that amount over six years, Kioxia CEO Hiroo Ota said on Thursday. The company intends to invest $11.3 billion (approx) on a new fab in Kitakami alone. That plant will make high-density 3D flash memory chips designed to help manage massive workflows generated by AI services. The investment reflects growing pressure to ramp up output and ease a global crunch that's raising the cost of electronics.

Kioxia plans new chip fab in Japan to meet AI memory demand

Kioxia Holdings is building a new chipmaking plant in northern Japan, ratcheting up production capacity to meet climbing AI-related demand for storage. The Tokyo-based maker of NAND flash memory will construct a third facility at its manufacturing site in Iwate Prefecture, people familiar with the matter said. The plant will make the company's latest high-density 3D flash memory chips designed to help manage massive workflows generated by AI services, the people said, asking not to be named unveiling plans that are private. Kioxia's investment, to be be carried out with manufacturing partner Sandisk, reflects growing pressure on the world's largest memory chipmakers to ramp up output and ease a global crunch that's hiking the cost of electronics. Prices for memory and storage -- key components of data centers -- are climbing worldwide, crimping margins for companies from Nvidia to automakers and mobile device makers. In a post-earnings briefing, Nvidia executives warned about supply constraints and pressure on margins. Kioxia and Sandisk will seek subsidies from the Japanese government, the people said. The Japanese chipmaker plans to announce the expansion, which was reported earlier by the Nikkei, early Thursday evening, one of the people said. The company said in a statement it's considering constructing new facilities among options to "steadily and sustainably" raise corporate value. Shares of Kioxia gained as much as 6.9% during morning trading in Tokyo. Kioxia Chief Executive Officer Hiroo Ota and Sandisk CEO David Goeckeler are scheduled to visit Prime Minister Sanae Takaichi later in the day. Kioxia likely secured favorable long-term contracts with customers that help guarantee future growth, said Kazuyoshi Saito, senior analyst at Iwai Cosmo Securities. "This is extremely positive." Big tech providers from Alphabet to Meta Platforms are signing multiyear contracts to secure memory and storage for data centers, spurring a flurry of big capex plans from Kioxia's South Korean rivals Samsung Electronics and SK Hynix. But China's Yangtze Memory Technologies is gaining market share in the lower-margin consumer segment. Fears that Kioxia might invest only in time to be whipsawed by a future supply glut have weighed on its stock price, which has halved since a June peak. Kioxia could easily fund billions of dollars' worth of capex with cash on hand, according to Citi analyst Takero Fujiwara. A decision would signal the company has secured long-term contracts indicating strong demand through 2028 at least, he said in a note to investors. "While the company remains cautious on capex, we believe it has demonstrated a willingness to invest when necessary," he said. Japan has been extending financial support to chipmakers with factories within its borders, including Taiwan Semiconductor Manufacturing, Sony Group and Micron Technology, aiming to claw back some of the country's former leadership in semiconductors. Kioxia, which began shipping its stacked 10th generation BiCS flash memory chips last month, plans to produce higher-end NAND chips used in data centers at the Iwate site. Its other major manufacturing base in Yokkaichi, Mie Prefecture, will focus on chips for consumer products including smartphones.

Kioxia, Sandisk to Invest More Than $31 Billion in Memory Chips -- Update

Kioxia Holdings and Sandisk plan to invest more than $31 billion in Japan to strengthen their joint venture and drive the large-scale supply of flash memory chips in the age of artificial intelligence. These investments through 2032 will support the continuing buildout of production infrastructure in Japan, along with related technology, the companies said Thursday. Kioxia also said it plans to build a new facility at its Kitakami plant in the northern Japanese prefecture of Iwate to expand flash memory production capacity. The company targets operations to begin in the fiscal year starting April 2029. The announcement of large investments by Kioxia and Sandisk comes as worries have grown over dizzying spending on AI infrastructure, though Nvidia's strong quarterly earnings and revenue guidance on Wednesday helped soothe such concerns. Earlier this month, SK Hynix said it planned to invest about $38 billion to expand semiconductor production capacity in South Korea, as it seeks to ramp up output to meet growing demand fueled by the AI boom. Kioxia and Sandisk specialize in NAND flash memory, used for long-term data storage, such as keeping photos on a phone. DRAM, which provides temporary storage for faster data-processing in servers, PCs and other electronics, is the other major type of memory chip. Kioxia said the flash memory market is expected to continue to expand significantly in the medium to long term, driven by agentic and other AI applications. The Japanese company said the construction schedule and equipment investments for the new facility will be determined based on market trends. The $31 billion of investments align with the Japanese government's economic policy goals and are contingent upon government support, Kioxia and Sandisk said. The Kioxia-Sandisk partnership has helped drive decades of NAND flash memory innovation and invested more than $50 billion in Japan over the past 25 years, the companies said. "Kioxia will continue to meet growing demand for high-capacity, high-performance, and power-efficient flash memory, which is essential to the growth of an AI-driven society," Chief Executive Hiroo Ota said.