Key facts
- Kioxia Holdings plans to invest over 1 trillion yen ($6.3 billion) in a new memory production facility in Japan.
- The new facility, Fab2 (K2) at the Kitakami Plant, has begun operations and will produce advanced 3D flash memory.
- Demand for high-capacity flash storage is driven by the AI inference boom, selling out Kioxia's 2026 capacity.
- Kioxia's stock has surged 670% in 2026, making it Japan's most valuable company.
- The Kioxia-SanDisk partnership is increasing capital expenditure by 41% to $4.5 billion.
Memory chip maker Kioxia Holdings plans to invest over 1 trillion yen ($6.3 billion) in a new production facility at its plant in northern Japan. The company has announced the start of operations at its Fab2 (K2) facility in Kitakami, Iwate Prefecture, which is equipped to produce advanced eighth-generation, 218-layer 3D flash memory using revolutionary CBA technology. This expansion is a response to the surging demand for high-capacity flash storage driven by the AI inference boom, which has already sold out Kioxia's entire NAND flash production capacity for 2026.
The Fab2 facility features an earthquake-absorbing structure, energy-saving equipment, and utilizes artificial intelligence for enhanced production efficiencies. A portion of its investment has been subsidized by the Japanese government. Kioxia is also preparing for the high-volume manufacturing of its 10th-generation 332-layer BiCS FLASH memory.
The dramatic increase in demand for AI inference has created a severe supply-demand imbalance for advanced 3D NAND flash storage. Kioxia has confirmed that its 2026 capacity is completely sold out, with the shortage expected to continue into 2027. The company is prioritizing long-term strategic partners for stable deliveries.
This corporate turnaround has been reflected in the financial markets, with Kioxia's stock surging by 670% in 2026, making it Japan's most valuable public company, surpassing Toyota. The Kioxia-SanDisk alliance is also boosting capital expenditure by 41% to $4.5 billion to support the scaling of advanced 3D NAND technology.