Kioxia Holdings Corp anticipates demand for NAND storage would grow by about 20 percent each year as artificial intelligence (AI) data center operators keep scaling up.
The Tokyo-based memory maker is confident that the market would sustain that rapid clip of expansion and is making investment decisions on a monthly basis to ensure its new plant is up to the task of filling the demand, Kioxia executive vice president Tomoharu Watanabe told Bloomberg News.
Kioxia’s specialty is in NAND flash memory, which is used everywhere from smartphones and laptops to the fast-access sections of data center operations.
Photo: Reuters
“Demand is strong, especially from hyperscalers who need chips for generative AI purposes,” Watanabe said yesterday.
“We’re also hearing from customers who need to replace data center servers they installed five to six years ago, as well as some saying they cannot get enough hard drives,” he added.
Alongside South Korean memory makers Samsung Electronics Co and SK Hynix Inc, Kioxia has this year surged in value as investors look to find more beneficiaries of the AI infrastructure boom. Its shares have more than tripled since its public debut in Tokyo in December last year.
The company this week began operations at the second fabrication facility of its Kitakami flash memory plant in Japan’s Iwate prefecture, where it plans to ship cutting-edge memory chips starting from the first half of next year.
Kioxia has been aggressively investing in its main chip factories in Kitakami and Mie prefecture’s Yokkaichi as it aims to close the gap with Samsung and SK Hynix.
The company plans to double the amount of memory it can produce at these factories within five years of its fiscal year 2024, which ended in March this year.
Memory prices are expected to bounce back gradually from a post-COVID-19 pandemic funk, as data center construction accelerates around the world.
The NAND market, in particular, which has long seen slowing demand for smartphones and PCs as well as excessive inventories, is showing signs of recovery.
NAND flash prices in the October to December quarter are expected to rise 5 to 10 percent from the previous quarter, Taiwan-based research firm TrendForce Corp (集邦科技) said.
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