Japanese memory-chip maker Kioxia and US-based Sandisk have announced plans to invest more than $31 billion in Japan through 2032, a move aimed at expanding flash-memory manufacturing capacity as artificial intelligence applications drive surging demand for data storage. The proposed spending, equivalent to roughly JPY 5 trillion, was disclosed in a joint statement on August 27, underscoring the intensifying capital race among semiconductor suppliers to secure production capacity for next-generation memory technologies.
The investment program, which remains contingent on Japanese government support, will focus on upgrading infrastructure and technology at Kioxia's Yokkaichi and Kitakami plants. The companies did not specify how the total outlay would be split between them, nor did they reveal the expected level of government assistance or an annual spending schedule. Industry analysts note that the announcement represents a long-term strategic blueprint rather than fully committed capital expenditure with all financing already secured, leaving room for adjustments based on policy decisions and market dynamics.
In a related development, Kioxia said it has 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, with the facility intended to expand production of its BiCS FLASH three-dimensional NAND technology. The Fab3 announcement did not include a firm construction timeline or equipment budget, with Kioxia stating that those decisions would depend on market conditions and reiterating that the project is contingent on government backing. 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, and that Kioxia CEO Hiroo Ota and Sandisk CEO David Goeckeler met Japanese Prime Minister Sanae Takaichi on August 27 to discuss the initiative.
Fab3 will be built south of the existing Fab2 complex, where Kioxia and Sandisk began operations in September 2025 with output expected to ramp in stages. According to Reuters, Kioxia is now manufacturing 10th-generation BiCS Flash, developed jointly with Sandisk, at Kitakami, giving the partners an operating base for the next phase of expansion. The wider investment program will also continue the buildout of the Yokkaichi plant, with both sites forming part of the companies' long-running manufacturing partnership under which they jointly develop and produce flash-memory wafers.
The spending plan highlights the growing capital requirements around AI infrastructure that extend well beyond graphics processors and high-bandwidth memory. NAND flash is essential for persistent storage in data centers and other devices, and suppliers are positioning higher-capacity, more power-efficient products to handle data-intensive AI workloads. Kioxia attributed its medium- and long-term outlook to expected demand from agentic AI, physical AI, and on-device AI, though these remain company projections rather than independently verified forecasts. Actual capacity additions will ultimately 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 over their 25-year relationship. In January, they extended their joint-venture agreements at the Yokkaichi plant through December 2034, a renewed framework that 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 latest plan is intended to deliver multi-year growth in flash-memory output and stable supply, though the companies 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, committing the companies to a multiyear capacity cycle in a sector known for swings in supply, pricing, and demand. The planned sequencing of construction and equipment purchases will therefore be critical to navigating those cycles. Japan has been using public support to strengthen domestic semiconductor production and supply-chain resilience, and the conditional nature of the Kioxia-Sandisk plan means the final scale and timing may shift depending on the level of government backing and market conditions through 2032.