Kioxia Rejects Potential Manufacturing Tie-up With SK Hynix

Kioxia Holdings Corp CEO Hiroo Ota has dismissed the likelihood of a manufacturing partnership with SK Hynix Inc, stating that the two companies are not in talks about joint production. Ota noted that such a tie-up would face antitrust hurdles and would be difficult to reconcile with Kioxia's existing joint manufacturing facilities with Sandisk Corp. This statement follows comments from SK Inc chairman Chey Tae-won, who had previously suggested a manufacturing tie-up as an option. An SK Hynix representative clarified that Chey was speaking in general terms and that no discussions are currently ongoing.

Simultaneously, Kioxia is working to stabilize memory chip prices to avoid hindering long-term demand for artificial intelligence. While NAND flash memory prices rose 70 percent in the June quarter, Ota has instructed sales teams not to push for substantially higher prices from data center operators. He warned that excessive price hikes could damage investment appetite in the AI sector and hurt market growth.

To meet soaring orders from AI service providers, memory chipmakers are investing heavily in production capacity. Kioxia and Sandisk plan to spend more than 5 trillion yen, or approximately 33 billion US dollars, to expand their joint facilities in Japan. SK Hynix is planning a 54 trillion won expansion in South Korea and is constructing a memory packaging facility in Indiana.

Kioxia is currently focusing on high-margin AI data center business to counter market share losses in consumer electronics to Yangtze Memory Technologies Co. The company recently began shipping 332-layer 10th-generation chips and is collaborating with Taiwan's Nanya Technology Corp on research and development for chips using metal-oxide materials.