Kioxia Draws the Line as the Memory Price Race Gets Hotter

The race for the memory chip market is getting intense, yet there are no indications of Kioxia being keen to make things more complex.

Kioxia CEO Hiroo Ota has rejected the suggestion of increased manufacturing collaboration with SK Hynix. The suggestion had been floated in recent times following comments by SK Group chairman Chey Tae-won.

Ota sees several problems. Antitrust concerns could make such a deal difficult, while Kioxia already operates joint manufacturing facilities with Sandisk. The two companies are also preparing major investments to expand flash memory production in Japan.

AI Is Driving Memory Prices Into Uncomfortable Territory

The real problem is not corporate collaboration. The real problem is the cost of memory.

AI firms are buying lots of chips, thereby forcing chip makers to boost production capacity. Simultaneously, memory prices have been soaring. According to Ota, prices have gone up sufficiently and any more increases may eventually impact demand for AI hardware.

Kioxia and Sandisk plan to invest more than $31 billion in Japan through 2032 to increase flash memory production. SK Hynix is also committing tens of billions of dollars to new capacity.

Our Take

There is a possibility that AI is triggering an intense memory revolution, but costly hardware can act as a hindrance to implementation eventually. If Kioxia and its competitors succeed in expanding production capacity without further increasing prices, then people will be able to enjoy cheaper SSDs, computers, and AI gadgets.

Until then, you can expect memory pricing to be under stress as companies compete to meet AI demand.

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