Kioxia forecasts a tripling in demand for NAND memory by 2028 — could further impact SSD pricing

Kioxia expects flash demand for NAND memory to increase 2.7 times by 2028, spurred by advances in artificial intelligence, Reuters reports. Kioxia will expand its manufacturing capacity and introduce new process technologies in the coming years to meet this upcoming demand.

The chipmaker is expanding its manufacturing capacity in Japan to support this anticipated growth. In particular, Kioxia is advancing construction at its Kitakami facility in Iwate prefecture, aiming for production by fall 2025 after a year-long delay. Production was initially planned for last year, but the timeline shifted due to the industry-wide drop in memory demand. This new capacity, combined with additional cleanroom space at its Yokkaichi plant, is expected to provide enough production bandwidth to address future market needs.

In October, Bain halted plans to list Kioxia on the stock market after potential investors urged a valuation cut. The company’s new commentary aims to enhance investors’ trust in long-term demand for 3D NAND memory in general and Kioxia’s products in particular, as well as re-emphasize plans to kick off production at the company’s second production facility in Kitakami.

Earlier this year, Kioxia resumed full-capacity production at its Yokkaichi and Kitakami fabs. The company had previously reduced production by over 30% starting in October 2022 due to weak demand for its 3D NAND memory used in smartphones. Demand for 3D NAND began to recover in the latter half of 2023 as memory inventories declined and the smartphone and PC markets slowly rebounded. Demand for memory chips used in these devices has now stabilized, with additional growth from datacenter orders.

As the demand for AI servers and datacenter-class storage devices grows, Kioxia can address both with 3D NAND flash memory and with enterprise-grade SSDs based on unique controllers and firmware. Other drivers that could lift demand for 3D NAND include on-device AI experiences, which require high-capacity high-performance local storage.

To bolster domestic production, the Japanese government has assigned up to $1.64 billion in subsidies for Kioxia and its partner, Western Digital, to expand their facilities in Yokkaichi and Kitakami. This move aligns with Japan’s strategic objective to revitalize its semiconductor industry and position Kioxia as a key player in the global 3D NAND market.