Kioxia warns NAND price rally will stall as PC demand slows

Kioxia Holdings warned on Nov. 1, 2026, that sequential price increases for commodity NAND flash memory used in personal computers and smartphones will flatten during the fourth quarter.

The Japanese flash memory manufacturer projected operating profit of 1.995 trillion yen ($13.1 billion) for the October-December period. That fell roughly 350 billion yen below market consensus forecasts of 2.35 trillion yen.

The warning underscores a widening split across the semiconductor sector between booming artificial intelligence infrastructure and stagnant consumer hardware. While enterprise demand remains tight, device makers are resisting higher component expenses.

Average selling price growth for NAND flash slowed to the mid-20% range in the July-September quarter. That marked a sharp deceleration from the 70% surge recorded during the April-June period.

Sequential price increases will effectively stop in the three months ending Dec. 31, the company said. Smartphone and PC assemblers have reached the limit of the component cost inflation they can absorb, corporate executives said during an investor briefing.

Client computing and mobile storage account for roughly half of worldwide NAND bit consumption. Consumer device vendors are paring memory configurations to safeguard operating margins, TrendForce data showed.

The flattening prices create uneven exposure across memory manufacturers in Japan and South Korea. Samsung Electronics and SK hynix each hold roughly 30% of global NAND production, but both have shifted capacity toward high-bandwidth memory and enterprise solid-state drives.

Kioxia reported consolidated revenue of 4.25 trillion yen for the six months ended Sept. 30, up 436.8% from a year earlier. Operating profit for the half reached 3.26 trillion yen, rising from 130.8 billion yen a year earlier.

Second-quarter operating profit alone stood at 1.995 trillion yen, yielding an operating margin of 80.4%. The result reflects high contract prices negotiated during the summer.

Enterprise solid-state drives for data centers remain heavily subscribed, driven by inference clusters, said Kioxia chief financial officers. However, general-purpose chips face mounting resistance from volume hardware brands.

Kioxia operates joint manufacturing lines with Western Digital and its spin-off Sandisk at Yokkaichi and Kitakami. The joint venture executes roughly $4.5 billion in annual capital expenditure to expand production of advanced 3D flash.

South Korean memory makers face similar margin pressures on legacy product lines. SK hynix generates more than 60% of its NAND revenue from enterprise drives, shielding it partly from weakness in client storage.

Samsung Electronics relies more heavily on mobile storage shipments, making it vulnerable to pushback from Chinese handset assemblers. PC original equipment manufacturers are actively substituting lower-capacity drives into baseline laptop configurations.

Kioxia resolved to pay an interim dividend of 90 yen per share on Dec. 8, distributing roughly 48 billion yen. The payout marks the company's first cash dividend distribution following its listing on the Tokyo Stock Exchange.

The company has not published wafer start volumes for its Yokkaichi and Kitakami facilities or disclosed the exact production split between legacy layers and its eighth-generation BiCS architecture.

Suppliers and purchasers enter contract negotiations for the first quarter of 2027 in mid-December, setting price benchmarks across East Asian assembly hubs.