Japanese memory-chip maker Kioxia and US-based Sandisk plan to invest more than $31 billion in Japan through 2032, expanding flash-memory manufacturing as artificial intelligence applications increase demand for data storage.
The planned spending, equivalent to about JPY 5 trillion, remains contingent on Japanese government support, the companies said in a joint announcement on August 27. The program will support infrastructure and technology at Kioxia’s Yokkaichi and Kitakami plants.
Kioxia and Sandisk did not disclose how the total investment would be divided between the companies, how much government assistance they expect, or an annual spending schedule. The announcement therefore represents a long-term plan rather than fully committed capital expenditure with all financing secured.
Kitakami expansion targets fiscal 2029
Kioxia separately said it had begun site preparation for Fab3, a new manufacturing facility at its Kitakami plant in Iwate Prefecture. The company is targeting the start of operations in fiscal 2029 and intends the facility to expand production of its BiCS FLASH three-dimensional NAND technology.
The Fab3 announcement did not provide a firm construction schedule or equipment budget. Kioxia said those decisions would depend on market conditions and reiterated that the project is contingent on government support.
Reuters reported that the new Kitakami facility would account for JPY 1.8 trillion, or about $11.3 billion, of the broader six-year plan. Reuters also reported that Kioxia CEO Hiroo Ota and Sandisk CEO David Goeckeler met Japanese Prime Minister Sanae Takaichi on August 27.
Fab3 will be built south of the existing Fab2 complex. Kioxia and Sandisk began operations at Fab2 in September 2025, with output expected to ramp in stages. Reuters said Kioxia is now manufacturing 10th-generation BiCS Flash, developed with Sandisk, at Kitakami, giving the partners an operating base for the next phase of expansion.
Kioxia said the wider investment would also continue the buildout of its Yokkaichi plant. Both sites are part of the companies’ long-running manufacturing partnership, under which they jointly develop and produce flash-memory wafers.
AI broadens demand beyond processors
The spending plan highlights the growing capital requirements around AI infrastructure beyond graphics processors and high-bandwidth memory. NAND flash is used for persistent storage in data centers and other devices, and suppliers are positioning higher-capacity, more power-efficient products for data-intensive AI workloads.
Kioxia attributed its medium- and long-term outlook to expected demand from agentic AI, physical AI and on-device AI. These are company expectations rather than independently verified forecasts, and actual capacity additions will depend on customer demand and the pace at which the companies equip their plants.
The partners said they have invested more than $50 billion, or about JPY 9 trillion, in Japan during their 25-year relationship. In January, they extended their joint-venture agreements at the Yokkaichi plant through December 2034. The renewed framework also aligned the term of their Kitakami arrangement and included $1.165 billion in payments from Sandisk to Kioxia from 2026 through 2029 for manufacturing services and continued supply availability.
The companies said the latest plan is intended to deliver multi-year growth in flash-memory output and stable supply. They did not provide a production-capacity target, expected revenue contribution or return on investment.
If completed in full, the new program would represent a major addition to the partnership’s historical investment in Japan. It also commits the companies to a multiyear capacity cycle in a sector known for swings in supply, pricing and demand, making the planned sequencing of construction and equipment purchases important.
Japan has been using public support to strengthen domestic semiconductor production and supply-chain resilience. The conditional nature of the Kioxia-Sandisk plan means the final scale and timing may change depending on the level of government backing and market conditions through 2032.
Featured image: Liam Briese on Unsplash
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