@jukan05: Kioxia: There Won't Be a Second Shock [Daishin Securities Semiconductor / Ryu Hy...
Kioxia: There Won't Be a Second Shock [Daishin Securities Semiconductor / Ryu Hyung-geun] This is a Kioxia FY3Q25 (CY4Q25) Review. We maintain our existing view that a surprise will emerge from NAND. This value needs to be further reflected in Korean semiconductor stock prices. We maintain our Buy recommendations on Samsung Electronics and SK Hynix. Kioxia FY3Q25 (CY4Q25) Review: Please Forget Last November's Disaster - Results were in line with consensus. The guidance was the surprise. The company issued guidance significantly above consensus, creating a markedly different atmosphere from last November's earnings release. - Throughout the recent upcycle, Kioxia's high revenue concentration toward a single customer has been a double-edged sword. Pre-negotiated long-term contracts meant products were supplied at prices below market rates, which was the key reason behind Kioxia's lower ASP growth relative to peers. - Recently, the company appears to have aggressively leveraged the tight supply-demand environment to push through price revisions. Starting from CY1Q26, the revised pricing policy is expected to take effect (estimated ~50% QoQ ASP increase for the North American customer in CY1Q26). This marks the moment Kioxia breaks free from its legacy constraints and the moment mobile NAND ASPs normalize. - Opportunities are also expanding on the server side. On top of a favorable market backdrop, competitiveness in high-capacity products of 128TB and above is expected to drive outperformance. NAND Is Just as Strong as DRAM - AI inference is strengthening the role of storage and driving higher content per unit. In addition, new products are set to be unveiled. At the upcoming GTC 2026 event, new products based on a next-generation solution (Gen 6 Controller) are expected to be announced. - The supply-demand balance is tightening to historically unprecedented levels. While concerns over weak set-level demand persist, opportunities in the server segment are more than offsetting them. - Meanwhile, supply discipline is strengthening across the industry. The prevailing approach is to respond through conversion investments and product mix shifts—which carry lower depreciation burdens—rather than new capacity additions. This signals a management philosophy increasingly centered on profitability and long-term supply-demand stability. - As a result, NAND ASPs are surging. 1Q26 NAND ASP is expected to rise in the mid-to-high 40% range QoQ, and we believe we will soon see operating margins reach the 50%+ levels that marked the previous peak. $SNDK $MU