What happened
Kioxia Holdings' CEO Hiroo Ota has dismissed the possibility of deepening collaboration with rival and shareholder SK Hynix, citing antitrust hurdles and coordination difficulties with its joint manufacturing facilities with SanDisk.
Ota stated that Kioxia is not in talks with SK Hynix for joint production and expressed confusion over recent remarks by SK Group Chairman Chey Tae-won suggesting such cooperation as an option.
He has instructed his sales team to avoid significant price hikes for data center operators, fearing that excessive increases could harm long-term AI demand.
Why it matters
Memory chip prices have surged dramatically, with Kioxia's NAND average prices rising 70% quarter-on-quarter in the June quarter after more than doubling the prior quarter, fueling concerns about affordability for AI infrastructure.
Ota's stance highlights a delicate balance: while manufacturers benefit from high prices, sustained increases could dampen investment in AI, potentially hurting the industry's growth trajectory.
The speculation about Kioxia-SK Hynix cooperation arises from their joint development of non-volatile magnetic memory and SK Hynix's stake in Kioxia, but Ota's rejection suggests such synergies are unlikely in the near term.
Key facts
Kioxia CEO Hiroo Ota ruled out deeper cooperation with SK Hynix, citing antitrust obstacles and coordination issues with SanDisk.
Kioxia and SanDisk plan to invest over 5 trillion yen to expand joint fab capacity in Japan.
SK Hynix holds bonds convertible into 14.19% of Kioxia's equity, potentially making it a major shareholder.
Kioxia's NAND average prices rose 70% quarter-on-quarter in the June quarter, following a doubling in the prior quarter.
What to watch next
Whether Kioxia can maintain current price levels without further hikes, as Ota aims to balance profitability with sustaining AI demand.
If any regulatory or strategic shifts could alter the dynamics between Kioxia, SK Hynix, and SanDisk, despite Ota's current dismissal.
How long-term supply agreements, which some customers seek through 2030, will shape Kioxia's pricing strategy and market position.
