Kioxia Holdings Corporation

Business Details

Kioxia Holdings is one of the world's largest flash memory specialist companies engaged in the research and development, manufacturing, and sale of memory and related products. With the Yokkaichi Plant and Kitakami Plant as its main manufacturing bases, the company supplies products across three application categories: SSD & Storage (for PCs, data centers, and enterprise use), Smart Devices (embedded memory for smartphones, automotive, and industrial equipment), and Others (retail products and sales to the Sandisk group). Production capacity at the Yokkaichi and Kitakami plants is shared through a manufacturing joint venture with the Sandisk group.

Recent Overview

Achieved significant revenue and profit growth, with revenue up 37% and operating profit up 93%, driven by generative AI demand

For the full year of FY2026 (ending March 2026), revenue was ¥2,337,628 million (up 37.0% year on year) and operating profit was ¥870,369 million (up 92.7% year on year), representing substantial growth in both revenue and profit. This was primarily driven by a significant rise in average selling prices for data center applications, centered on generative AI use cases, along with increased shipment volumes. In the fourth quarter (January to March 2026), further increases in average selling prices led to sharp growth compared to the prior quarter. As a subsequent event, the company acquired shares of Nanya Technology Corporation for ¥78,208 million in April 2026. In addition, for the first quarter of FY2027 (ending March 2027), the company expects revenue of ¥1,750,000 million (up 74.5% quarter on quarter) and operating profit of ¥1,298,000 million (up 117.5% quarter on quarter).

Key Products

Growth Drivers

• Rapid expansion of demand for SSDs used in generative AI and data center applications (significant rise in average selling prices driven by increased SSD adoption in AI servers)
• Increasing memory capacity per device driven by the spread of on-device AI in smartphones and PCs
• Enhanced cost competitiveness through mass production rollout of 8th-generation BiCS FLASH™ (incorporating CBA and OPS technologies)
• Recovery in demand for smartphones and PCs as customer inventory adjustments that occurred at the end of the prior fiscal year normalize
• Expansion of business foundation through the acquisition of shares in Nanya Technology Corporation (April 2026)
• Reduced capital expenditure burden through government subsidy income (¥56,396 million in FY2026, ending March 2026)

Risks

• Risk of cyclical fluctuations in supply and demand and sharp declines in average selling prices in the flash memory market (uncertainty over the sustainability of the current high-price environment)
• Intensifying price competition due to competitors' increased capacity and supply expansion (ongoing downward trend in selling prices per unit of storage capacity)
• Impact on supply chains and sales from geopolitical risks such as US-China tensions and potential contingencies involving Taiwan
• Foreign exchange impact on revenue and profit from yen appreciation (in FY2026, ending March 2026, the average USD/JPY rate was ¥150, appreciating compared to the prior period)
• Risk of breaching financial covenants (such as maintaining consolidated leverage ratio and total equity above ¥500 billion)
• Continued high level of interest-bearing debt (non-current bonds and borrowings of ¥872,116 million) due to issuance of USD-denominated unsecured straight bonds, and continued high financial expenses of ¥96,708 million
• Risk of increased cash outflows associated with expanded capital expenditure (acquisition of property, plant and equipment of ¥281,062 million)