NAND flash memory demand surges: The rise of the "second-tier alliance" Kioxia and SanDisk

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NAND is transforming from a cyclical commodity back into a key component of AI infrastructure. Structural changes on the demand side have lifted prices and valuations, also putting previously second-tier players Kioxia and SanDisk under the spotlight.

As AI workloads shift from training to inference, SSD deployment in AI data centers has expanded. Data centers’ NAND flash purchases have surged, creating a market opportunity window for non-traditional leading manufacturers.

Kioxia and SanDisk have maintained deep cooperation for over 25 years. Through joint ventures and co-development, both parties share the costs of expensive equipment and R&D, spreading expenses with economies of scale.

In terms of technology, SanDisk focuses on integrating HBF into products from Nvidia, AMD, and Google. Kioxia places greater emphasis on SSD performance breakthroughs.

AI Demand Opens a Breakthrough

According to EE Times, as AI workloads shift from training to inference, SSD deployment in AI data centers is expanding, giving NAND a new demand driver.

For investors, this means that NAND’s prosperity is no longer dependent only on traditional consumer electronics cycles, but is increasingly tied to data center CapEx and architectural evolution.

This trend presents a key opportunity for Kioxia and SanDisk. In the traditional market landscape, Samsung, SK Hynix, and Micron have long dominated. But the rapid expansion of AI infrastructure has created a huge supply gap, prompting data center operators to actively seek diversified supplier portfolios to ensure supply chain stability.

TrendForce data shows that in Q3 2025, Samsung leads with 32.3%, SK Hynix with 19.3%. Kioxia ranks next with 15.3%, surpassing Micron, and SanDisk holds 12.4%. Both companies’ global influence in the NAND market is on the rise.

Technology Alliance Lays the Foundation

Kioxia and SanDisk have maintained deep cooperation for over 25 years. The two companies operate NAND production bases in Yokkaichi and Kitakami, Japan, which are among the world’s largest NAND flash manufacturing hubs.

Technologically, the two sides co-developed BiCS FLASH 3D NAND, currently at the eighth generation BiCS8 (218 layers). According to Knowing.asia, the 10th generation, with over 300 layers, is planned for production starting in 2026.

Facing CapEx pressures, this joint model helps spread costs. Knowing.asia notes that through joint ventures and co-development, both parties share the costs of expensive equipment and R&D, using scale to counter the Korean memory giants.

Market Priorities Diverge, Betting on Different Technology Roadmaps

According to Knowing.asia, Kioxia and SanDisk’s market focuses clearly diverge: Kioxia mainly supplies Japanese and global large electronics makers, while SanDisk dominates the consumer storage market and has a strong presence in enterprise SSDs in North America and abroad.

On the technical route, HBM is constrained by capacity and cost. NAND optimizes AI architecture through two technological paths: HBF (high-capacity near-storage) and AI SSDs (intelligent preprocessing).

According to Sisa Journal, SanDisk aims to integrate HBF into products from Nvidia, AMD, and Google by late 2027 to early 2028. The report states that HBF uses TSV vertical stacking similar to HBM, but is based on NAND, allowing larger capacity at lower cost—approximately 10 times the capacity of HBM, though still slower than HBM.

Kioxia is more focused on performance leaps in SSDs. According to Nikkei, Kioxia plans to launch a new hard drive by 2027 with speeds nearly 100 times current products; they are working with Nvidia for generative AI servers, with products connecting directly to GPUs and partly substituting HBM to expand GPU memory capacity.

Market Focus: Price Elasticity, Technology Delivery, and Alliance Boundaries

With AI inference demand continuously rising, surging NAND demand across the supply chain has become a central narrative. For the market, Kioxia's market value breaking 10 trillion yen and SanDisk's aggressive price hikes have reinforced expectations for a NAND upcycle and profit recovery.

The next phase will hinge on three variables: First, whether price hikes can continue and translate into improved profits. Second, whether technical roadmaps such as BiCS10, HBF, and ultra-high IOPS SSDs are delivered on schedule. Third, beyond shared manufacturing and R&D, how Kioxia and SanDisk manage boundaries in end-product competition to avoid internal friction undermining collaboration.

Risk Notice and DisclaimerThe market has risks, and investments must be made cautiously. This article does not constitute personal investment advice and does not take into account individual users’ specific investment goals, financial situation, or needs. Users should consider whether any opinion, view, or conclusion in this article is suitable to their particular situation. You are responsible for your own investment decisions.

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