Kioxia, the world's third-largest NAND flash memory manufacturer, plans to invest over 1 trillion yen (approximately $9 billion) to build a new semiconductor production facility in Iwate Prefecture, Japan, in response to rising demand for artificial intelligence (AI). This investment is seen as a countermeasure to the large-scale expansion plans announced by industry leaders Samsung Electronics and SK Hynix in South Korea. The Japanese government is also expected to support this initiative with subsidies aimed at enhancing domestic semiconductor production for economic security.
According to the Nikkei newspaper on August 27, Kioxia has decided to construct a third production building at its Kitakami plant in Iwate. Kioxia executives are scheduled to visit the Prime Minister's office to announce their investment plans. The new facility will focus on mass production of NAND flash memory used for long-term data storage, aiming to accelerate the production of high-performance products in response to the surge in AI demand.
Hiroo Ota, President of Kioxia, mentioned during an investment briefing in June that discussions about the new production facility were underway, with operations expected to commence after 2029. The plans, which were still in the review stage two months ago, have now been solidified. The company has already begun discussions with some suppliers regarding the equipment needed for the new facility.
Kioxia currently operates two production bases in Japan: the Yokkaichi plant in Mie Prefecture and the Kitakami plant in Iwate. This investment will add a third production building to the Kitakami site, with participation from U.S. memory company SanDisk.
In terms of market share, Kioxia ranks third in the global NAND flash market by revenue, following Samsung and SK Hynix. As both Samsung and SK Hynix have recently announced significant expansion investments in South Korea, Kioxia's decision to invest 1 trillion yen marks its entry into the competitive race for memory production aimed at AI demand.
The Japanese government's semiconductor industry promotion policies also underpin this investment. The Takaiichi administration has designated semiconductors as one of 17 strategic sectors and is supporting the expansion of domestic production for economic security. Kioxia is expected to utilize subsidies from the Ministry of Economy, Trade and Industry for this investment, further strengthening Japan's semiconductor production base.
Meanwhile, Kioxia has seen SK Hynix become its largest shareholder. On August 11, Kioxia announced that Toshiba's stake in the company had decreased from 14.48% to 14.12% as of August 3. Consequently, the special purpose vehicle (SPV) BCPE Pangea Cayman 2, in which SK Hynix participates, has become the largest shareholder with a 14.19% stake. However, SK Hynix has indicated that it will maintain a distance from Kioxia's management participation.
* This article has been translated by AI.
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