Kioxia Holdings (KXIAY) is pushing deeper into AI data center storage as the Tokyo-based chipmaker begins shipping samples of its next-generation flash memory chips to AI data center operators. The move could help Kioxia gain ground in a high-value market where larger rivals currently hold stronger positions. Its latest 332-layer, 10th-generation 3D flash memory chips offer improved efficiency and transmission speeds, while storing 59% more data than Kioxia's previous flagship 8th-generation chip.
Production of the new chips will take place at Kioxia's second manufacturing facility in Kitakami, which began operating in September last year. US hyperscalers are expected to tour the facility next week, adding another sign that AI data center customers could become increasingly important to Kioxia's growth strategy. CEO Hiroo Ota said the company has seen no signs of weaker data center demand and would not hesitate to raise capital spending plans if the market grows faster than expected.
The new chips, designed for solid-state drives, are central to Kioxia's attempt to benefit from rising AI storage demand and reduce reliance on smartphone-related products such as those tied to Apple. Kioxia still trails Samsung Electronics (SSNLF) and SK Hynix (HXSCL) in data-center flash memory, with Omdia estimating Samsung held 40%, SK Hynix 30%, and Kioxia 10% last year. Even so, Kioxia aims to generate more than 60% of revenue from data center chips by fiscal 2028, while its shares reversed double-digit losses to rise 9.2% in Tokyo.