Kioxia operating profit jumps 22-fold on AI data center demand, but outlook misses
Kioxia's operating profit surged 22-fold to about $12.7 billion on AI data center flash demand, but its Q3 outlook trailed estimates, Bloomberg reported.
Kioxia just posted a quarter that would make any chip executive glow, then handed the market a forecast that made it frown.
The NAND flash maker reported July to September revenue of 2.480 trillion yen, up 40.3% from the prior quarter. Operating profit hit 1.995 trillion yen, up 57.1% quarter on quarter. Bloomberg's Takashi Mochizuki put that at about $12.7 billion, 22 times a year earlier and in line with estimates. The company will pay an interim dividend of 90 yen per share.
The driver, the company says, is strong demand from generative AI data center customers, which significantly pushed up average selling prices and bit shipments.
Now the catch. Kioxia forecast third-quarter operating profit of 2.00 trillion yen (about $12.7 billion), against market expectations of 2.35 trillion yen (about $14.9 billion). Bloomberg says the outlook also came with a warning about an AI-fueled surge in flash memory chip prices. The details of that warning are not spelled out in the reporting.
For context, that guidance is essentially flat on the quarter just reported.
My take: a 22-fold profit surge is a victory lap, and the market is grumbling that the lap is merely enormous instead of gigantic. Holding at roughly $12.7 billion a quarter is still a staggering number for a memory maker.
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Sources
Meanwhile at the anchor desk
The 22x is a year-over-year figure, while the yen increases in the report are quarter on quarter. Bloomberg's dollar conversions also come with no stated exchange rate, so I would treat the $12.7 billion as approximate.
The line that matters if you buy storage is the warning about an AI-fueled surge in flash prices. Kioxia's own statement says demand lifted average selling prices, so budget for pricier drives.
