Kioxia Stock Plunges 15% on Weak Guidance; Firm Insists AI Demand Remains Robust
SingTao · 2 SOURCESabout 3 hours ago3 MIN
Summary
Japanese memory chip maker Kioxia Holdings (stock code: 285A on the Tokyo Stock Exchange) experienced a sharp stock decline on Monday after releasing quarterly guidance that disappointed investors, sparking fears that the explosive growth fueled by artificial intelligence may be tapering off. The company's shares fell as much as 15% before partially recovering, trading down more than 11% at 11,960 yen. Kioxia reported expected operating profit of 2 trillion yen (approximately 127 billion US dollars) for the quarter ending December, falling below the analyst consensus of 2.35 trillion yen and representing only marginal growth compared to the 1.99 trillion yen recorded in the September quarter. Company management explained that the guidance miss was primarily due to adjustments in delivery schedules, with some orders moved forward to the September quarter at customers' request, while other orders were pushed back due to longer production times for enterprise storage products. Despite the near-term headwinds, Chief Financial Officer Yoshihiko Kawamura stated during an earnings call that demand from AI data center operators remains robust, and the company expects to return to rapid growth in the March quarter. Looking ahead, Kioxia's planned production for next year is already completely sold out, with more than half of its 2028 output already pre-ordered, and some major clients have begun negotiating contracts extending into 2029 and beyond.
Key Points
- Kioxia's shares dropped as much as 15% on Monday before paring losses, trading at 11,960 yen with a decline exceeding 11%
- The company guided for 2 trillion yen in operating profit for the December quarter, below the analyst expectation of 2.35 trillion yen
- Some orders were pulled forward to the September quarter while others were delayed to the March quarter due to production schedule adjustments
- CFO Yoshihiko Kawamura affirmed that AI data center demand remains strong and expects rapid growth to resume next March
- Bloomberg reported that management's cautious tone has left investors increasingly skeptical about the company's growth narrative
Why It Matters
The sharp reaction to Kioxia's guidance underscores how closely investors are monitoring the sustainability of AI-related semiconductor demand. A potential weakness for Kioxia is that, unlike Korean competitors, it only manufactures NAND flash memory and lacks the ability to bundle DRAM chips in commercial negotiations, which could limit its market share as AI infrastructure spending continues . For Hong Kong investors tracking the semiconductor sector through exchange-traded funds or related technology stocks, this episode highlights the volatility risks inherent in supply-chain beneficiaries of the AI boom.
The sharp reaction to Kioxia's guidance underscores how closely investors are monitoring the sustainability of AI-related semiconductor demand. A potential weakness for Kioxia is that, unlike Korean competitors, it only manufactures NAND flash memory and lacks the ability to bundle DRAM chips in commercial negotiations, which could limit its market share as AI infrastructure spending continues . For Hong Kong investors tracking the semiconductor sector through exchange-traded funds or related technology stocks, this episode highlights the volatility risks inherent in supply-chain beneficiaries of the AI boom.