Kioxia and SanDisk plan $31 billion Japan chip investment

Kioxia and SanDisk said Thursday they plan to invest more than 31 billion dollars, roughly 5 trillion yen, in Japan through 2032, expanding the flash memory manufacturing partnership that supplies a large share of the world's NAND chips. The companies described the plan as contingent on support from the Japanese government, which has previously subsidized the same manufacturing sites.

The centerpiece is a third plant at Kioxia's manufacturing complex in Iwate Prefecture, joining the existing Kitakami fabs there. The new facility is intended to produce the companies' latest high-density 3D flash memory, the kind of chip used to store and retrieve data at the scale modern AI systems require.

The investment builds on a series of moves this year. In January, Kioxia and SanDisk extended their Yokkaichi joint venture agreement through 2034, with Kioxia's chief executive, Nobuo Hayasaka, saying the partnership remained committed to "flash memory products that drive the transformation of a digital society powered by AI," and SanDisk's chief executive, David Goeckeler, calling the venture a source of "the highest performing, lowest cost NAND technology to both companies." In July, the pair began production of their tenth-generation 3D flash memory at one of the Iwate fabs.

The underlying driver is a shift in what AI infrastructure needs. Much of the last few years of AI spending went into training hardware. As more of that spending moves into running already-trained models at large scale — inference — the storage requirement changes: serving models to millions of users continuously needs far more high-capacity, high-performance storage than training runs alone did. That shift is a major reason NAND flash demand, and prices, have been climbing industry-wide this year, a trend that has separately pushed up costs for AI servers built around Nvidia and other chipmakers' hardware.

Neither company detailed how the $31 billion would be staged year by year, or specified the size of the government support the plan depends on.