Shares of Kioxia surged 8.8% to $35.66 after SK Group Chairman Chey Tae-won publicly named the Japanese flash-memory maker as a potential partner for a joint chip plant in Japan — the clearest signal yet that the world's No. 2 and No. 3 NAND producers could formally team up.
• SK Hynix Already Quietly Controls Kioxia's Biggest Stake. SK Hynix has indirectly become Kioxia's largest shareholder, with its Bain Capital investment vehicle holding 14.19% of shares — a position gained after Toshiba reduced its stake from 15.10% to 14.06% through share sales in July and August . SK Hynix agreed to keep its voting stake at 15% or less through 2028 unless Kioxia approves a higher level . That cap expires in less than two years. Chairman Chey calling joint production "one option" is not casual talk — it's a preview of what may come once that handshake agreement lifts.
• Together They Could Overtake Samsung. The arithmetic is hard to ignore: combined, Kioxia's output and SK Hynix's would control roughly 36% of the global NAND flash market, enough to leapfrog Samsung, whose share stands at 25% . For Kioxia shareholders, that means potential pricing power and cost-sharing on fabs that run billions of dollars each. Chey said Japan is "a highly attractive candidate in terms of both risk and culture," and noted SK had received proposals from several local governments — a sign the Japanese government's generous chip subsidies, already extended to TSMC, could defray a large portion of construction costs.
• Kioxia's Sold-Out Capacity Makes the Case Urgent. Kioxia confirmed that its entire NAND flash production capacity for 2026 is already sold out , driven by AI inferencing workloads, traditional server replacement, and a hard-drive shortage pushing demand to high-capacity SSDs . Yet its Q2 market share slipped from 13.9% to 11.4% as rivals grew faster . A joint fab would address this bottleneck directly, adding output without Kioxia bearing the full capital burden alone.
• The Risks Are Real — Regulators and Conflicts of Interest. Kioxia's own annual report lists SK Hynix's claim as a risk factor, calling it a possible conflict of interest . To convert its bonds into shares and exercise voting rights, SK Hynix would need merger reviews in multiple countries, and resistance is expected to be especially strong from the Japanese government . Investors should treat today's pop as a down payment on a deal that still faces years of regulatory and geopolitical friction before it reshapes the bottom line.