With a loss of 100.8 billion yen in Q2, Kioxia said that the price of NAND flash memory has bottomed out

International Electronic Business News on the 14th Japanese NAND flash memory manufacturer Kioxia (Kioxia) Kioxia announced its latest financial report on Tuesday, pointing out that the company’s operating loss in the second quarter was 100.8 billion yen (about 4.848 billion yuan) due to the decline in demand for memory chips used in smartphones and personal computers (PCs) that affected profits.

Since the start of the pandemic, memory chip manufacturers have been grappling with declining demand, oversupply in the market, and increasing pressure on industry consolidation. Not long ago, merger talks between Kioxia and Western Digital ended in failure due to opposition from SK hynix.

Kioxia used to be the memory business unit of Toshiba, a leader in the semiconductor market. Since Toshiba was lagging behind Samsung Electronics and facing management challenges, it was decided to spin off the memory division. In 2018, Toshiba sold a majority stake in Toshiba Storage to a U.S. consortium led by Bain Capital, when SK hynix invested in Bain Capital and indirectly held a stake in Kioxia.

International e-commerce has also done relevant reports before. The main reason for the stall in the merger talks is the strong opposition from SK hynix, an indirect shareholder of Kioxia. If the merger is successful, the new company will control one-third of the global NAND flash memory market, alongside Samsung Electronics, and will inevitably threaten SK hynix’s market position.

As a result, Western Digital has announced that it will spin off its memory business, but remains open to alternatives that could bring “higher value” to the planned spin-off.

While AI investments are expected to boost the chip industry, the rebound in demand for NAND flash memory for data storage is uncertain. Kioxia said that NAND sales prices have bottomed out, and shipments of smartphones and PCs are expected to increase next year.

Kioxia said revenue fell sequentially, but the loss was smaller, driven by higher average selling prices and a weaker yen.