Kioxia Holdings Corp’s top executive brushed aside the likelihood of deeper ties with rival and stakeholder SK Hynix Inc, while pledging to keep surging memory prices at bay to avoid denting long-term artificial intelligence (AI) demand.Makers of memory chips are embarking on costly production capacity increases to meet soaring orders from AI service providers that are fueling double or even triple-digit price rises. Investors including the chairman of SK Hynix’s parent, SK Inc, have said manufacturing partnerships might help lower the risk of huge capital commitments needed.However, 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 Corp, Kioxia chief executive officer Hiroo Ota said.
Kioxia Holdings Corp chief executive officer Hiroo Ota poses for a photograph at the company’s headquarters in Tokyo on Tuesday.
Kioxia would need to find other ways to restrain runaway memory prices, Ota said.“Prices have already risen enough,” he said.
In an interview with the Asahi newspaper earlier this month, SK Inc chairman Chey Tae-won listed a manufacturing tie-up between Kioxia and SK Hynix as an option.An SK Hynix representative said that 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. “We have no idea what prompted [Chey] to say what he did.”The South Korean and Japanese chipmakers are not in talks about joint production, he said.Chronic shortages of an array of memory chips have spurred Kioxia and Sandisk to together plan more than ￥5 trillion (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.Kioxia’s average NAND flash memory price rose 70 percent in the June quarter compared with the prior three-month period, when prices more than doubled.However, Ota, who took Kioxia’s helm in April, said he has instructed his sales teams not to push for substantially higher prices from data center operators, out of fear of damaging investment appetite in the AI sector.Ota did not rule out price hikes, but said Kioxia’s priority for now was on keeping chip prices at their current high levels.“We would end up hurting our own market and growth if we pushed prices up too much,” Ota said.Another 70 percent quarter-on-quarter increase in prices seems unlikely, he said. “Even hyperscalers have limited budgets.”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 getting close to achieving its goal to have 50 percent of its shipment volume covered by long-term agreements, he added.Kioxia has been focusing its resources on the high-margin AI data center business as Chinese upstart Yangtze Memory Technologies Co (長江存儲) 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 Corp (南亞科技), with the goal of supplying an alternative to conventional DRAM.The partnership is limited to research and development, but the two companies would consider “various options” when the efforts result in a viable commercial product, Ota said.
