Kioxia Forecasts 2.7x Growth in NAND Memory Demand by 2028, Driven by AI Boom

Kioxia's Ambitious Growth Projection

Kioxia Corporation, a major player in the semiconductor industry, has announced a bold forecast for NAND flash memory demand. The company expects demand to increase by approximately 2.7 times in the five years leading up to 2028 1

1

2

2

3

3

4

4

5

5

. This projection is primarily driven by the rapid growth and advancements in artificial intelligence (AI) technologies, which require more sophisticated and higher-capacity memory solutions.

Expansion of Production Capacity

To meet this anticipated surge in demand, Kioxia is taking significant steps to expand its manufacturing capabilities:

1. Kitakami Facility Expansion: Construction is underway at the new fabrication plant in Kitakami, Iwate Prefecture. Originally planned to begin production last year, the facility's launch has been rescheduled to autumn 2025 due to previous market downturns 1

   1

   2

   2

   3

   3

   .

2. Yokkaichi Plant Enhancement: Kioxia is also expanding the cleanroom space at its Yokkaichi plant in Mie Prefecture, further boosting its production infrastructure 1

   1

   .

3. Advanced Fabrication Processes: The company plans to adopt new process technologies crucial for producing higher-density memory chips required for AI applications 1

   1

   .

Market Recovery and AI-Driven Demand

Kioxia's optimistic outlook comes after a period of market volatility:

• In October 2022, the company reduced output by more than 30% due to decreased demand for 3D NAND memory used in smartphones 1

  1

  .
• The second half of 2023 saw a recovery in demand as memory inventories decreased and the smartphone and PC markets gradually improved 1

  1

  .
• The growth of AI is now driving investment in servers, with the potential to renew demand for smartphones and PCs featuring AI capabilities 2

  2

  3

  3

  4

  4

  .

Government Support and Industry Significance

Kioxia's expansion plans are receiving substantial government backing:

• The Japanese government has pledged subsidies of up to $1.64 billion to Kioxia and its partner Western Digital for expanding facilities in Yokkaichi and Kitakami 1

  1

  2

  2

  3

  3

  4

  4

  .
• This support underscores Kioxia's importance in Japan's efforts to revitalize its semiconductor industry 4

  4

  5

  5

  .

Corporate Developments and Challenges

Kioxia has faced several corporate challenges:

• The company, formerly known as Toshiba Memory, was carved out from scandal-hit Toshiba by a Bain Capital-led consortium 2

  2

  3

  3

  4

  4

  .
• Plans for an initial public offering were scrapped in October after investors pushed for a significantly lower valuation 2

  2

  3

  3

  4

  4

  .

Despite these hurdles, Kioxia remains a key player in the global semiconductor industry, with its latest projections and expansion plans signaling confidence in the growing demand for NAND flash memory, particularly in the AI sector.