Kioxia Posts Record Q2 Profit With 80.4% Operating Margin

What happened

On Oct. 30, Kioxia reported revenue of 2.48 trillion yen for the second quarter of fiscal 2026 (July-September), up 453.2% from a year earlier, and operating profit of 1.9947 trillion yen, up 2,222% year on year, marking a second consecutive quarter of record performance following the April-June period. Revenue rose 40.3% quarter on quarter and operating profit 57.1%. Gains were driven by higher NAND average selling prices (ASPs): NAND ASPs rose by more than 20% quarter on quarter in US dollar terms, while bit shipments increased by more than 10%. Revenue in the SSD and storage segment surged 560.8% from a year earlier to 1.616 trillion yen, with data center and enterprise products accounting for more than 60% of segment revenue; smart devices segment revenue rose 401.5% to 788.9 billion yen. The operating margin reached 80.4%, up 61.2 percentage points from a year earlier and 8.5 percentage points from the previous quarter, exceeding the July-September margins of Samsung Electronics' Device Solutions (DS) division at 72% and SK hynix at 79.7%. Kioxia expects NAND demand to continue expanding, with increased adoption of high-capacity QLC SSDs particularly in data centers, but relatively weak demand in the smartphone and PC markets. Its medium- to long-term outlook remains positive: its entire production capacity for 2027 has already been allocated to customers, and more than half of its projected shipments for 2028 have been reserved under multiyear long-term agreements (LTAs). The company plans to expand capacity at its existing Yokkaichi and Kitakami plants and is preparing a site for a third facility in Kitakami, known as K3, targeted to begin operations in fiscal 2029. However, Kioxia expects earnings growth to slow in the third quarter (October-December), forecasting revenue of 2.5 trillion yen and operating profit of 2 trillion yen, both virtually unchanged from the previous quarter, attributing the slowdown to foreign exchange pressures from a stronger yen, with an expected negative impact of about 55 billion yen from currency fluctuations.

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Source: The Elec · 11/2/2026 · View original source