Sandisk has risen 1,000% in the stock market since the summer. Its advantage is called Kioxia
In just five months, Sandisk shares have soared 1,000% in one of the most astonishing recoveries in Wall Street history. The company has been the latest big beneficiary of the AI boom and the rush to build data centers full of advanced AI chips… and also the memories that accompany those chips. That’s where Sandisk’s great asset comes in, called Kioxia. Value of Sandisk shares in the last six months. Source: Google Finance. Without knowing it, SanDisk was ready for the revolution. HBM memories were traditionally the favorites to accompany GPUs that were the great “brain” of AI, but the scarcity of these components with high bandwidth has meant that the spotlight has been focused for a few months on DRAM and NAND memories, two types of storage in which sanDisk is a dominant player. Like other manufacturers in its segment —Micron is one of the outstanding—, SanDisk has suddenly found itself in a situation that benefited it enormously. free money. The memory chip market works like a commodity market in which leverage can be significant. That means that when prices rise, companies like SanDisk don’t need to invest in new factories or employees to earn more — although they can build them if they deem necessary. It is as if for Micron or SanDisk this phenomenon is equivalent to “free money” because they are receiving much more income for the same products they sold a year or two ago. Not even they themselves expected it: SanDisk CEO David Goeckeler talked about the rise of AI in June, and commented “We try to estimate demand. We think demand is good. What we need is to get supply to match that.” He couldn’t anticipate what would happen with memories starting in September. DRAM and NAND memory prices are skyrocketing from the end of 2025. Source: Sherwood. The key alliance: Kioxia. In recent times SanDisk has grown significantly in your solid state drive business (SSD) for enterprise data centers. But it also maintains a historical strategic alliance with the Japanese company Kioxia, which allows it to obtain NAND chips at a much lower cost than its rivals. The profit margin skyrockets, and so do the shares on the stock market. A relationship with ups and downs. The relationship between Sandisk and Kioxia (formerly Toshiba Memory) is based on a Joint Venture from more than 20 years ago focused on the development of NAND memories. This alliance has achieved advances such as the memories BICS Flash (with 3D storage technology), the wafers that leave their factories are shared between both companies. Kioxia went through a difficult time after Toshiba’s financial crisis and failed merger attempts with Western Digital. They survived all this, and together with Sandisk now the Japanese company controls 30% of the global NAND market. Some win, others lose. The investment fund Elliot Management pushed in early 2025 for SanDisk will separate from Western Digital. They believed that at that time it was worth about $20 billion—as when he bought it a decade ago—, and that fund sold its stake just before the total market explosion. Today that stake would be worth more than $340 million. Bad business for users. But in addition to that background, the ones who have it most complicated are the users, who will continue to suffer the consequences of this phenomenon for months, and perhaps years. Neither Micron nor Sandisk/Kioxia appear to have any intention of significantly expanding production capacity. They already did this during the pandemic and that caused excess inventory when demand fell after confinement. Now they do not want to expose themselves to the same thing, and there is talk that the price increase will continue throughout 2026 and may let’s take a long time in seeing memories at prices “like those before”… if we end up seeing them. Image | Igor Shalyminov In Xataka | Japan has taken out the checkbook to once again dominate the chip industry. Prepare a plan of 325,000 million dollars