Fueled by expanded investment in artificial intelligence (AI) data centers, global memory chipmakers have sharply increased their cash generation. As U.S. Big Tech pours massive funds into building AI infrastructure, analysts said that money is flowing through to memory companies' results.
Nihon Keizai Shimbun (Nikkei) reported on the 1st that an analysis of results for the global top five memory chipmakers—Samsung Electronics, SK hynix, Micron Technology, Kioxia and SanDisk—showed their second-quarter free cash flow (FCF) this year posted a combined surplus of 14.8 trillion yen (about 135.7 trillion won). That is about 92 times larger than the same period a year earlier. Micron's figures cover March to May, and SanDisk was tallied based on market forecasts.
Nikkei also said that during the same period, the free cash flow of U.S. Big Tech—Alphabet, Microsoft (MS), Amazon and Meta—was in the red due to AI infrastructure investment, analyzing that a clear pattern has emerged of AI investment funds flowing into the memory chip industry.
Profitability also improved significantly. The combined second-quarter net profit of the global top five memory companies was 24.7 trillion yen (about 226.4 trillion won), 16 times higher than a year earlier.
Kioxia, Japan's only listed memory company, also benefited from AI. Kioxia's second-quarter free cash flow was 749 billion yen (about 6.9 trillion won), up 28-fold from a year earlier.
However, Nikkei assessed that Kioxia's cash generation falls well short of Samsung Electronics and SK hynix, which recorded free cash flow in the tens of trillions of won. It also analyzed that the capacity for investment differs, noting that its planned capital spending through 2028 is 1.4 trillion yen (about 12.8 trillion won), smaller than rivals.