Kioxia Chief Dismisses Deeper SK Hynix Ties, Vows Price Control

Kioxia Holdings Corp. Chief Executive Officer Hiroo Ota has dismissed the possibility of tighter manufacturing cooperation with SK Hynix Inc., pointing to antitrust concerns and entanglements involving the company's current joint production facilities with Sandisk Corp.

Ota said that memory chip prices have already risen sufficiently and that the company intends to keep further hikes in check to avoid undermining long-term demand from artificial intelligence. Across the sector, manufacturers are boosting production capacity to keep pace with growing orders from AI service providers, with prices having surged by double or triple digits.

In an interview with the Asahi newspaper earlier this month, SK Inc. Chairman Chey Tae-won raised the possibility of a manufacturing partnership between Kioxia and SK Hynix. A representative for SK Hynix later clarified that Chey was speaking in broad terms and that no formal discussions are under way.

"We can't just say, 'Well then, let's make it three companies,'" Ota said in an interview with Bloomberg News, referring to a hypothetical three-way manufacturing arrangement involving SK Hynix and Sandisk. "We have no idea what prompted (Chey) to say what he did." Ota confirmed that the Korean and Japanese chipmakers are not in talks about joint production.

Kioxia specializes in NAND flash memory chips used for high-capacity data storage. The company and Sandisk plan to spend more than ¥5 trillion ($33 billion) to expand production capacity at their jointly owned facilities in northern and central Japan. Meanwhile, SK Hynix plans a 54 trillion won ($40 billion) expansion of its chipmaking facilities in Korea and is building an advanced memory packaging facility in West Lafayette, Indiana.

SK Hynix holds bonds that are convertible into a 14.19% stake in Kioxia. The two companies are collaborating on the development of nonvolatile magnetic memory, and Kioxia also sources DRAM from SK Hynix for use in some of its solid-state drives.

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