Domestic semiconductor corporations that produce equipment for NAND flash manufacturing are focusing on supplying Kioxia, the world's third-largest NAND flash corporation based in Japan. As investments related to NAND from Samsung Electronics and SK Hynix are expected to concentrate on transitioning to advanced processes, Kioxia is reportedly set to invest in expanding its new production lines for next-generation products based on funds secured through its listing and support from the Japanese government.
According to industry sources on the 19th, Kioxia plans to proceed with expansion investments for next year based on the funds raised from its listing on the Tokyo Stock Exchange this month and government subsidies. Kioxia previously stated that it plans to produce next-generation NANDs at its factories in Yokkaichi, Mie Prefecture, and Kitakami, Iwate Prefecture, starting in September next year. A total of 700 billion yen (approximately 6.5 trillion won) will be invested, with around 240 billion yen (approximately 2.24 trillion won) expected to be supported by the Japanese government.
Kang Seong-chul, a professor at the Ulsan National Institute of Science and Technology (UNIST), noted, "Samsung Electronics and SK Hynix are minimizing the production of legacy products in consideration of the NAND market situation, focusing instead on process transitions for solid-state drives (eSSD) that are in higher demand for artificial intelligence (AI)." He added, "Kioxia, which has recently been listed, needs to establish new product lines to solidify its position as the third-largest NAND corporation globally. It is practically emerging as the only new demand source for NAND-related equipment."
The upcoming investments in NAND-related technology from Samsung Electronics and SK Hynix, which hold the first and second positions in the NAND market share, are expected to focus more on transitioning to advanced processes rather than expansion. Unlike DRAM, where demand is increasing due to high-bandwidth memory (HBM) and AI servers, the sales of NAND are largely concentrated on corporate eSSD.
Due to the IT market recession over the past two years, NAND demand has frozen, leading to a halt in facility investments. Last year, Samsung Electronics, SK Hynix, and others reduced their NAND factory operating rates to between 20% and 30%. Although this year, demand has revived with a focus on high-capacity NANDs for AI data centers, raising operating rates above 70%, the demand has not expanded to the point where additional investment is necessary, unlike in HBM and DRAM.
Park Yoo-ak, a researcher at Kiwoom Securities, stated, "Most of Samsung Electronics' investments related to NAND will be allocated to upgrading existing facilities (process transitions), and new equipment investments are expected to be extremely limited." Kim Young-geon, a researcher at Mirae Asset Securities, projected that while over 50,000 wafers of DRAM expansion investments are anticipated for SK Hynix, NAND will remain unchanged.
In this context, domestic semiconductor equipment corporations are pinning their hopes on Kioxia. Currently, among domestic semiconductor corporations, Aros Technology and Techwing are supplying equipment to Kioxia. Aros Technology is supplying overlay measurement equipment used to assess the alignment of semiconductor circuit patterns, while Techwing is providing handlers that classify defective and non-defective products. PSK is supplying PR strip equipment that removes residual photoresist after the exposure process and is currently undergoing quality testing. It is also reported that Chang Sung Engineering is considering supplying atomic layer deposition (ALD) equipment that applies thin films as protective layers to semiconductor devices.
A representative from the semiconductor equipment industry said, "Currently, the only hope is Kioxia," adding that "I have heard that investments for facilities to produce next-generation products such as 400-layer NANDs will begin as early as June next year."
Meanwhile, Kioxia, which was listed on the Tokyo Stock Exchange on the 18th, recorded a market capitalization of 863 billion yen (approximately 8.1 trillion won) based on its closing price. The consortium comprised of Bain Capital and others has contributed 56% of the funding, while Toshiba has invested 41%. SK Hynix invested about 4 trillion won in this consortium in 2018.