NAND flash supercycle, reaching the highest market capitalization in Japan, Kioxia remains cautious, and capital expenditure over the next three years will still be 10% lower than the historical peak.

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Just on June 16th, Kioxia’s market value briefly surpassed 50 trillion yen, becoming the second company in Japanese history to reach this magnitude. Earlier, on June 10th, Kioxia’s stock price surged 8% in a single day, its market value broke through 44 trillion yen, officially surpassing Toyota Motor and topping Japan’s stock market in terms of market capitalization. From being ranked 169th to first place in market value, Kioxia took only one year.

However, at the peak of its market value, Kioxia has shown surprising restraint when it comes to expansion.

Burned Once, This Time They Dare Not Expand Recklessly

According to the latest report from Nikkei, Kioxia plans to spend an average of about 470 billion yen annually on capital expenditure in fiscal years 2026 to 2028, an increase of 66% from FY2025, totaling about 1.4 trillion yen over three years.

The numbers seem sizable, but this annual level is still about 10% lower than Kioxia’s historical peak of 510.4 billion yen in FY2023.

Why not go all out when the market is booming? The answer lies in a lesson from 2022.

In 2022, Kioxia spent a lavish 1 trillion yen to expand the Yokkaichi factory, but demand plummeted rapidly after the pandemic, and the company suffered losses for five consecutive quarters, lasting until the fourth quarter of 2023.

This experience directly shaped Kioxia’s current investment logic: strictly control cash flow, focus spending on the Kitakami plant in Iwate Prefecture—where usable cleanroom capacity remains, so there’s no need for zero-to-one construction.

NAND Prices Soar, But Kioxia Chooses "Winning by Lying Low"

Kioxia’s conservatism has coincided perfectly with a strong rebound in the NAND market.

TrendForce data shows that in Q2 2026, contract prices for NAND flash are expected to rise 70% to 75% sequentially; SLC NAND average prices have already risen by about 130% to 150% in the first half of this year.

TrendForce also predicts that in 2026, the NAND market will see a clear supply shortage, while large-scale new capacity will not be available until late 2027 to 2028 at the earliest.

This means Kioxia can enjoy profit improvement and cash flow recovery brought by price increases without significantly expanding production.

Long-term Agreements: Locking in Revenue, or a Sign the Cycle Is Peaking?

Against the backdrop of tight supply, cloud service providers are scrambling to sign long-term supply agreements (LTAs).

According to Global Economic News, Kioxia’s President Hiroo Ota has clearly set a goal: by 2028, to lock in 50% of shipments through multi-year LTAs with hyperscale cloud service providers.

For Kioxia, LTAs mean stable income and smoother cycle fluctuations.

But there’s another side to this coin. The report analyzes that LTA signing surges have historically appeared during periods of extremely tight supply—buyers rush to secure capacity, sellers want to lock in high prices, and this "two-way pursuit" sometimes signals the market is near the cycle’s peak.

Kioxia’s Restraint Allows Samsung and SK Hynix to Capitalize

With Kioxia holding off, who fills the supply gap in the market?

Kioxia’s supply discipline is further tightening generic NAND supply, creating opportunities for Samsung Electronics and SK Hynix—these two companies may use this to restore, or even unexpectedly expand, capacity, thereby supporting price trends in the short term.

Meanwhile, Korean suppliers of materials, components, and equipment will also benefit, especially atomic layer deposition (ALD) equipment manufacturers—a key aspect for advanced NAND manufacturing.

Bain Capital and SK Hynix Are the Biggest Winners of the Feast

With Kioxia’s market value surging, the direct beneficiaries may not be Kioxia itself, but its shareholders.

The Financial Times reports that Bain Capital is expected to benefit more than $15 billion from its 2018 acquisition of Kioxia. Although Bain Capital is reportedly cleared its position, the Korea-U.S.-Japan joint fund—including SK Hynix and other investors—still holds 18% of Kioxia, and this potential profit has yet to be realized.

Market expectations show that, with Kioxia’s valuation soaring after its listing, the joint fund’s total return may exceed $70 billion.

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