Kioxia CEO Dismisses Deeper Manufacturing Ties With SK Hynix, Citing Antitrust Risks

Kioxia Holdings Corp. Chief Executive Officer Hiroo Ota has dismissed the possibility of a deeper manufacturing alliance with SK Hynix Inc., citing potential antitrust issues and the complexity of its long-standing partnership with Sandisk Corp. Ota also signaled a strategic shift toward price stability, stating that the company aims to prevent further memory chip price increases that could stifle long-term demand from the artificial intelligence sector.

Partnership Ruled Out

In an interview with Bloomberg News, Ota directly addressed recent comments from SK Inc. Chairman Chey Tae-won, who had floated the idea of a manufacturing partnership. Ota confirmed the two chipmakers are not engaged in any discussions about joint production.

"We can’t just say, ’Well then, let’s make it three companies,’" Ota said, referring to the difficulty of adding SK Hynix to its established joint facilities with Sandisk. "We have no idea what prompted (Chey) to say what he did." An SK Hynix representative previously clarified that the chairman's remarks were made in general terms and that no formal discussions were underway.

Price Control and AI Demand

The CEO's comments on pricing reflect a strategic focus on the sustainability of the current market upswing. While memory chip manufacturers have benefited from prices rising by double or triple digits amid surging orders from AI service providers, Ota indicated that prices have now risen sufficiently. He expressed concern that further increases could damage long-term demand, a crucial consideration as the industry invests heavily to meet AI-related needs.

Ad

Industry Context and Investments

Kioxia, a specialist in NAND flash memory used for high-capacity data storage, and its partner Sandisk are planning to invest over ¥5 trillion ($33 billion) to expand their joint production facilities in Japan. Separately, SK Hynix is undertaking its own massive expansion, including a 54 trillion won ($40 billion) investment in its Korean facilities and a new advanced packaging plant in Indiana.

Despite the dismissal of a manufacturing alliance, the companies maintain some ties:

• SK Hynix holds bonds that can be converted into a 14.19% stake in Kioxia.
• The firms are collaborating on the development of nonvolatile magnetic memory.
• Kioxia sources DRAM chips from SK Hynix for use in some of its solid-state drives.