The growth of AI has fueled a remarkable turnaround for Kioxia, which was previously seen as an example of Japan's chipmaking struggles but whose shares have surged more than sevenfold this year to a market capitalisation over $250 billion, exeeding Toyota Motor's (7203.T).
Formerly Toshiba Memory, Kioxia was acquired from beleaguered industrial conglomerate Toshiba by a Bain Capital-led consortium in 2018 for 2 trillion yen ($12 billion).
The company, which invented NAND flash memory in the 1980s, was buffeted by a downturn in memory prices that forced Bain to push back plans to take the company public to late 2024.
In the early stages of the AI boom, manufacturers of DRAM memory chips used to store data were seen as the main beneficiaries, in particular SK Hynix (000660.KS), a pioneer of high-bandwidth memory (HBM).
However as AI usage has expanded from training models on large volumes of data to inference, the process of answering queries, demand for high-capacity NAND memory has grown.
Chipmakers "prioritised DRAM so much that they put NAND investment and development on the back burner," said Satoru Oyama, a consultant who worked at Tokyo Electron (8035.T).
"They haven't been able to respond to the current NAND boom at all. That is why demand is now concentrated on Kioxia alone," he said.
Kioxia will mass produce 10th-generation BiCS Flash memory, which was developed with California-based Sandisk (SNDK.O), at its fab at Kitakami in Iwate prefecture, north of Tokyo.
The chipmaker is two to four years ahead of rivals with NAND performance and power consumption due to strengths such as its wafer bonding technology, said Kazuyoshi Saito, an analyst at IwaiCosmo Securities.
Kioxia has said it is considering a stock split and aims to list American depositary shares on a U.S. exchange early in the next financial year, which begins in April 2027.
South Korea's SK Hynix is also planning a U.S. listing and aims to raise up to $29.4 billion as Asian companies look to access a deeper pool of capital.
($1 = 162.5500 yen)
