Closer links with the South Korean chipmaker will run into antitrust hurdles, says CEO
Published Wed, Sep 9, 2026 · 10:02 AM
[TOKYO] Kioxia’s top executive brushed aside the likelihood of deeper ties with rival and stakeholder SK Hynix, while pledging to keep surging memory prices at bay to avoid denting long-term artificial intelligence demand.
Makers of memory chips are embarking on costly production capacity increases to meet soaring orders from AI service providers that are fuelling double- or even triple-digit price rises.
Investors including the chairman of SK Hynix’s parent SK have said manufacturing partnerships may help lower the risk of huge capital commitments needed.
But oft-floated closer ties with SK Hynix would run into antitrust hurdles and be difficult to square with Kioxia’s jointly-owned manufacturing facilities with Sandisk, according to Kioxia chief executive officer Hiroo Ota.
Kioxia would need to find other ways to restrain runaway memory prices.
“Prices have already risen enough,” he said.
In an interview with the Asahi newspaper earlier in September, SK chairman Chey Tae-won listed a manufacturing tie-up between Kioxia and SK Hynix as an option.
An SK Hynix representative said Chey was speaking in general terms, and that no discussions are ongoing.
“We can’t just say, ‘Well then, let’s make it three companies,’” Ota said of a hypothetical Kioxia-SK Hynix-Sandisk manufacturing tie-up in an interview with Bloomberg News.
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“We have no idea what prompted (Chey) to say what he did.” The Korean and Japanese chipmakers are not in talks about joint production, he said.
Kioxia, which specialises in Nand flash memory chips – used for high-capacity mass data storage – has in 2026 taken centre stage in a global AI investment rush.
The world’s biggest companies are hurrying to secure supplies of advanced chips from Kioxia and bigger rivals Samsung Electronics, SK Hynix and Micron Technology for their AI platforms and are offering lucrative multi-year contracts.
Chronic shortages of an array of memory chips have spurred Kioxia and Sandisk to together plan more than 5 trillion yen (US$33 billion) in spending to expand production capacity at their jointly-owned facilities in northern and central Japan.
SK Hynix plans a 54 trillion won (US$40 billion) expansion of its chipmaking facilities at home in South Korea and is also building an advanced memory packaging facility in West Lafayette, Indiana.
Speculation of closer ties between SK Hynix and Kioxia is on the rise because the two manufacturers are working together to develop non-volatile magnetic memory, while Kioxia sources DRAM used in some of its solid-state drives from SK Hynix.
SK Hynix also owns bonds that can be converted into a lead 14.19 per cent stake in Kioxia. That is as Sandisk works with SK Hynix on high-bandwidth flash memory.
The former memory chip operation of Toshiba is also navigating rising investor hopes that the current shortages – expected to last years while plants in the pipeline come online – mean continued leaps in chip prices.
Kioxia’s average Nand price rose 70 per cent in the June quarter compared with the prior three-month period, when prices more than doubled. Analysts on average expect the company’s operating profit to climb more than nine times in the year to March.
‘Even hyperscalers have limited budgets’
But Ota, who took Kioxia’s helm in April, said he has instructed his sales teams not to push for substantially higher prices from data centre operators, out of fear of damaging investment appetite in the AI sector.
Ota did not rule out price hikes in future, but said Kioxia’s priority for now was on keeping chip prices at their current high levels, he said.
“We would end up hurting our own market and growth if we pushed prices up too much,” Ota said. Another 70 per cent quarter-on-quarter increase in prices seems unlikely, he said. “Even hyperscalers have limited budgets.”
Climbing prices have buoyed shares of Kioxia, which are up 18 times from a year ago.
The company in June briefly topped SoftBank Group and Toyota Motor to become Japan’s most valuable company.
Kioxia’s stock has lost ground since then, however, on concerns about overcapacity, rising debt levels and fierce competition in the AI sector.
Demand from the world’s biggest tech providers for Nand chips remains strong as some seek contracts that extend to 2030, Ota said. Kioxia is on the cusp of achieving its goal to have 50 per cent of its shipment volume covered by long-term agreements, he said.
Kioxia has been focusing its resources on the high-margin AI data centre business as Chinese upstart Yangtze Memory Technologies is gaining market share in cheaper flash memory for consumer electronics.
The Japanese company would not chase market share “for the sake of market share”, but would instead strive to provide the technology that companies will seek out first, Ota said.
In July, the Tokyo-based company began shipments of its latest high-density 3D flash memory – 332-layer 10th-generation chips boasting higher transmission speeds and efficiency.
Kioxia is also developing chips that use metal oxide materials in place of silicon with Taiwan’s Nanya Technology, with the goal of supplying an alternative to conventional DRAM.
The partnership is now limited to research and development, but the two companies will consider “various options” when the efforts result in a viable commercial product, Ota said. BLOOMBERG