Kioxia SSD Revenue Up 453 Percent as AI Datacenter Demand Surges

Kioxia recorded ¥2.48 trillion (about $15.8 billion) in revenue for the July–September quarter, up 453 percent year over year and 5.5 times the SSD revenue of a year ago. The Japanese NAND maker credited AI-driven datacenter server demand. One quarter's takings now exceed the entire 2025 fiscal year, which totaled ¥2.4 trillion ($15.6 billion).

Net profit reached ¥1.35 trillion ($8.6 billion), 3,200 percent higher annually and roughly 50–57 percent above the prior quarter. Kioxia said the sequential increase "was primarily due to a significant increase in average selling prices (ASPs) resulting from strong demand from datacenter customers focusing on generative AI, as well as an increase in bit shipments."

How do the segments break down?

• SSD and storage: ¥1.62 trillion ($10.3 billion), with about 65 percent from datacenters and 35 percent from smartphones
• Smart devices: ¥789 billion ($5 billion), driven mostly by price increases
• Other: ¥75.2 billion ($478 million)

The company has posted three consecutive quarters of accelerating growth. It has moved from a sub-¥500 billion per quarter business to a ¥2.5 trillion per quarter one. Shareholders are sharing the windfall: Kioxia is paying ¥48 billion in interim dividends (¥90 per share), with the year-end dividend undecided and another share buyback possibly coming.

What is driving datacenter demand?

Kioxia said AI demand "remains exceptionally strong, driven by growing demand of agentic AI applications" and that KV Cache demand continues to grow. This fuels what the company called an "explosive increase in AI-generated data" that supports adoption of high-capacity QLC SSDs. KV Cache demand is for TLC SSDs.

A spokesperson said: "We have started mass production of our LC9 Series QLC SSDs, including a 245TB model, and customer qualification is progressing steadily. We are actively expanding sales of these products to enterprise and hyperscale customers as solutions that enable high-capacity systems."

PC shipments were pressured by higher costs, and Kioxia expects PC NAND demand to decline throughout calendar 2027. In smart devices, unit shipments of lower-priced smartphone models are slowing, though premium model sales are holding up.

How does Kioxia compare with Sandisk?

Kioxia's flash revenue of $15.8 billion, up 453 percent, now exceeds that of Sandisk, its NAND fab joint-venture partner, which posted $11 billion, up 378 percent. Kioxia was better positioned as a datacenter supplier when AI flash demand took off.

The partners are expanding output at Yokkaichi Fab 7 and Kitakami Fab 2. A third Kitakami fab is under construction, with operations set to start in 2029.

What about supply commitments?

Kioxia holds long-term agreements covering supply and prices for larger customers. Multi-year LTAs already cover more than 50 percent of production volume for calendar 2028. Production capacity for the rest of 2027 is sold out. The company noted that "given very strong requests from customers, we have also begun discussions with customers on longer-term horizons such as CY2029 and CY2030, with a view to developing business schemes."

What comes next?

Guidance for the third fiscal 2026 quarter stands at ¥2.5 trillion ($15.9 billion), 360 percent higher year over year but up just 0.8 percent sequentially. Kioxia expects a negative currency impact to hold revenue and profit broadly flat, despite continued strong datacenter demand.

The company forecasts NAND market bit growth in the high-teens percent range for the rest of calendar 2026, accelerating to the low-20-percent range in 2027, with more growth in 2028. Kioxia reckons its growth could accelerate in the fourth quarter.

Kioxia completed a 3-for-1 stock split effective October 2026, after its share price rose too high, to broaden its investor base.