Chipmaker Kioxia's market value halves from peak on AI selloff Kioxia overtook auto giant Toyota in market cap value in mid-June, but its ranking has since dropped to the fourth-largest Japanese company, as traders grow more critical over artificial intelligence. Japanese memory chipmaker Kioxia Holdings' market capitalization halved in just a month since becoming the nation's most valuable company, on growing concerns the artificial intelligence-driven rally in the sector has gone too far. Kioxia shares tumbled as much as 16% in Tokyo's morning trading on Friday, down 52% from last month's peak and losing at least ¥30 trillion ($185 billion) in value. In mid-June, Kioxia overtook auto giant Toyota in market cap value after the stock rallied more than 600% from the start of the year, driven by exuberance about demand for memory and data storage amid an AI boom. Its ranking has since dropped to the fourth-largest Japanese company. "The chip sector is vulnerable to the silicon cycle, and we've seen this pattern many times before," said Yugo Tsuboi, chief strategist at Daiwa Securities.

The global race to build artificial intelligence data centers has turbocharged business for chipmakers, creating shortages and sending prices soaring for memory components in particular. And Kioxia is reaping the rewards. In a time of both misinformation and too much information, quality journalism is more crucial than ever. By subscribing, you can help us get the story right. With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.

Since their listing in 2024, Kioxia's shares have surged on runaway demand for AI memory chips. Bain Capital has sold its entire stake in flash memory chipmaker Kioxia Holdings, closing a chapter on a deal that's transformed the Japanese tech and investment landscape. "We don't have a stake any more in Kioxia," Bain Managing Partner David Gross said in an interview. The U.S. private equity firm has logged record-setting returns after a global spending spree on AI catapulted Kioxia's shares more than 4,800% from their debut, transforming the chipmaker into one of Japan's most valuable companies. "It's worked spectacularly for all the stakeholders involved," Gross said.

Hiroo Ota (center left), CEO of Kioxia Holdings, and others unveil Kioxia's new 3D flash memory chip at its Kitakami plant in Kitakami, Iwate Prefecture, on Friday. Kioxia Holdings has started shipping samples of its next-generation flash memory chips to artificial-intelligence data center operators, seeking to gain ground in the lucrative business against rivals. The Tokyo-based chipmaker's latest high-density 3D flash memory chips aim to better meet AI data center needs with better efficiency and transmission speeds. The 332-layer 10th-generation chips pack more data into silicon and can store 59% more data compared with its previous flagship 8th-generation chip, the company said Friday. Production will take place at the company's second manufacturing facility at its Kitakami plant in Iwate Prefecture, which began operating in September last year.

Shares are up more than 300% this year for the Tokyo-based company. Kioxia Holdings' shares were untraded in a glut of buy orders Monday morning after the supplier of storage for artificial intelligence data centers reported soaring profit and gave an outlook that trounced expectations. The Tokyo-based company said it expects to earn an operating profit of ¥1.3 trillion ($8.2 billion) during the June quarter, above the record profit it earned for the full year ended March. Its quarterly profit also surged past expectations, surpassing that of Toyota's, making Kioxia one of Japan's most profitable businesses. Kioxia's shares are up more than 300% this year.

SwiftStack is being acquired by NVIDIA. SwiftStack is a software-driven data storage and management platform for data-intensive applications and workflows, providing access to data across the edge, core data centers and public clouds. The image below, from the SwiftStack web site gives some idea of the SwiftStack software ecosystem. SwiftStack says that it has worked for more than a year with NVIDIA to solve the data challenges to enable AI at scale. The release about the announcement says that, "Last year, when we announced SwiftStack 7, we unveiled our focus on the SwiftStack Data Platform for AI, HPC, and accelerated computing. This included SwiftStack 1space as a valuable piece of the puzzle, enabling data acceleration in the core, at the edge, and in the cloud."