Kioxia's ASP guidance far exceeds expectations—are NAND prices stronger than imagined?

Forget about Wall Street’s conservative pricing models for the storage cycle—the reality of the NAND market is far more feverish than imagined.

On May 18, according to information from Wind Chasing Trading Desk, the latest research reports from JPMorgan and BofA Merrill Lynch cross-validate a harsh reality: NAND pricing power is now fully controlled by the supply side.

Kioxia’s latest financial report and guidance not only utterly crush expectations, but the surge in its Average Selling Price (ASP) has shocked the market. Driven by a boom in demand for enterprise-grade SSDs (eSSD) fueled by AI and extremely restrained industry capital expenditures, the structural imbalance between supply and demand is expected to persist until 2027, creating major upside risk for global NAND ASP forecasts.

JPMorgan immediately raised Kioxia’s target price from 38,000 yen to 80,000 yen (based on 7x P/E for FY2026/2027), the highest target price in the market, indicating significant room for revaluation even after a 326% surge this year.

Performance & Guidance Both Surpass Expectations — ASP Growth Tramples Peers

Kioxia delivered a flawless Q4 FY2025 report (Q1 calendar year 2026), achieving revenue of 1,000.3 billion yen (up 189% YoY, up 84% QoQ), and operating profit of 596.8 billion yen (up 16-fold YoY, up 4-fold QoQ).

What truly shocked the market was its pricing power. Bank of America pointed out that Kioxia’s ASP doubled QoQ this quarter (up over 100%), outpacing Korean memory peers’ performance (up about 80%) by a full 20 percentage points.

Despite a 10% QoQ decline in shipments due to planned maintenance and prior inventory allocation, the sales share of SSD and storage has climbed from the mid-50% range in the previous two quarters to 60%, with product mix optimization directly driving profit explosion.

Even crazier is its guidance for Q1 FY2026 (Q2 calendar year 2026): Revenue is expected to reach 1,750 billion yen (up 5-fold YoY, up 75% QoQ), and operating profit an astonishing 1,298 billion yen (up 29-fold YoY, up 13x QoQ).

Bank of America analysis suggests this revenue guidance implies Q2 NAND ASP will see about 70% QoQ growth, far outstripping market consensus (less than 50%).

Extremely Restrained CapEx — Supply-Demand Imbalance to Persist Until 2027

Why are NAND prices so resilient? The answer lies in unprecedented “supply discipline” in the industry.

JPMorgan points out, Kioxia’s guidance for FY2026 CapEx is only 450 billion yen, meaning CapEx accounts for just 5% of sales (the average over the last five years was over 20%). The company stated clearly that investments will remain disciplined—no rapid expansion—and will mainly focus on BiCS 8 equipment and R&D for next-generation BiCS 10.

While supply maintains “high-teens %” restraint in bit growth, the demand side is experiencing a structural shift. Generative AI accelerates server storage adoption, with demand tilting toward high-performance inference products (TLC NAND’s prospects are significantly stronger than QLC NAND intended to replace nearline HDD).

JPMorgan forecasts this supply-short situation will last until 2027, and expects that, with improved product mix and successful price hikes, Kioxia’s ASP/bit growth in calendar year 2026 will exceed 250%.

With both spot and contract prices soaring, Kioxia is locking in long-term victory.

Management revealed that in Q4, they signed some medium- and long-term agreements (LTA) covering calendar years 2027–2028, and plan to steadily increase such agreements. JPMorgan believes LTAs will become the key factor for Kioxia’s valuation re-rating.

Thanks to high operating leverage and industry-leading low bit costs, JPMorgan forecasts Kioxia will generate 17 trillion yen in free cash flow over the next three years.

Industry Chain Cross-Validation of “Supercycle”—Massive Upside Risk for NAND Pricing

Combining Kioxia’s financials and BofA Merrill’s industry tracking, the current strength of NAND prices has exceeded most institutional forecasts:

NAND contract price (512Gb wafer) is now about $25, about 10x higher than the February 2025 trough of $2.5;

NAND spot price has risen more than 50% since the start of the year, and is about 8x higher than the February 2025 low ($2.4);

Client SSD price (for PCs) doubled in April compared with end-2025, while the full-year 2025 increase was only 35%-40%.

Kioxia’s strong performance is not an isolated case—downstream industry chain data is cross-validating this supercycle.

BofA data shows Taiwanese NAND module manufacturer Phison delivered supercycle-level performance in April: sales up 237% YoY, pre-tax profit margin at 45%, and net profit margin at 38%.

Confronted with Kioxia’s guidance and Phison’s data, Bank of America admits that there is currently enormous upside risk in forecasts for global NAND ASP.

Whether it’s BofA’s own previous forecast (expecting QoQ growth of 34%, 9%, and 3% in Q2, Q3, and Q4), or bullish forecasts from teams like TrendForce (expecting 70–75% growth in Q2, with only 8–13% after), all now appear overly conservative compared to current reality.

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The above highlights are from Wind Chasing Trading Desk.

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