Kioxia Hits SK Hynix’s 80% Margin but Guides Revenue Flat

Kioxia said on 30 October 2026 that its revenue for the July-to-September quarter was 2,480.0 billion yen and its operating profit 1,994.7 billion yen, according to its results filing. By our arithmetic, that is an operating margin of 80.4%, level with the 80% SK hynix reported for the same quarter.

Kioxia then guided October-to-December revenue to 2,500.0 billion yen, up 0.8% on the quarter, after a 40.3% quarter-on-quarter rise in the July-to-September period, by our arithmetic. The company says revenue and profit should be “broadly in line” with the second quarter.

Short explainer · Kioxia Hits an 80% Margin, Then Guides Revenue Up Just 0.8%

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Business Pill · The Memory Wall

An evergreen Business Engineer explainer on the memory wall. It teaches the general idea only and does not discuss Kioxia or these results.

Context (30 Oct): Altman on why memory makers add capacity cautiously. OpenAI CEO Sam Altman, said on the Cheeky Pint podcast (Stripe’s John Collison, published 29 October): “For a very long time, if you were a producer of DRAM, you would invest $20 billion of CapEx to make $19 billion.” He added: “And then all of a sudden, these guys are each going to make like $100 billion of free cash flow in a year. Unbelievable. But, I think they all remember their history. How many times they almost went bankrupt by making too many fabs and being promised this time it was different.” These are his words, not company guidance.

What Kioxia Reported

Kioxia said revenue rose 712.9 billion yen from the previous quarter “primarily due to a significant increase in average selling prices (ASPs) resulting from strong demand from data center customers focusing on generative AI, as well as an increase in bit shipment”.

SSD & Storage revenue was 1,616.0 billion yen and Smart Devices revenue 788.9 billion yen, according to the filing. For the six months to 30 September, revenue was 4,247.2 billion yen, up 436.8% from a year earlier, the company said.

Kioxia reported its results in yen. At the company’s own average rate of 161 yen to the dollar for the quarter, revenue was about $15.4 billion and operating profit about $12.4 billion, by our arithmetic. Wall Street Engine put revenue at $15.77 billion on X, a conversion at a different rate.

What Was Posted on X

Wall Street Engine posted Kioxia’s July-to-September highlights in dollars, including revenue of $15.77 billion against an estimate of $15.61 billion and an operating margin of 80%, and an October-to-December revenue guide of $15.9 billion against an estimate of $18.6 billion.

@TheTranscript_ quotes OpenAI CEO Sam Altman saying DRAM producers used to invest $20 billion of capex to make $19 billion, and that memory makers remember how many times they almost went bankrupt by building too many fabs.

Why the Guide Is Flat

The filing says: “While demand for data centers is expected to remain strong, factors such as the negative impact of exchange rates are expected to lead to revenue and profit for the third quarter being broadly in line with that of the second quarter”.

Kioxia assumes an average rate of 157 yen to the dollar for the October-to-December quarter, against 161 yen in the July-to-September quarter. In dollars at those rates, the 2,500.0 billion yen guide is about $15.9 billion, about 3.4% above the second quarter, by our arithmetic.

Wall Street Engine compared that $15.9 billion guide with an estimate of $18.6 billion on X; by our arithmetic, the guide is about 14.5% below that estimate. The company does not give full-year plans, saying the memory industry is “highly volatile over short periods”.

Three Memory Makers Near 80%

Kioxia’s 80.4% operating margin compares with 79.7% at SK hynix, whose third-quarter operating profit was 83.3338 trillion won on 104.6155 trillion won of revenue, by our arithmetic from figures in our earlier piece. At Sandisk, GAAP operating income of $8.78 billion on $11.0 billion of revenue is a margin of about 80%, by our arithmetic from figures in our earlier piece.

The guides differ. Sandisk, Kioxia’s manufacturing joint-venture partner, forecast second-quarter revenue of $12.2 billion to $12.6 billion, about 12.7% above its latest quarter at the midpoint, by our arithmetic. Kioxia’s filing says its “Other” revenue line includes “sales to the Sandisk group recorded through its three manufacturing joint ventures”.

Where the Cash Went

For the six months, Kioxia reported 2,379.6 billion yen of operating cash flow and spent 135.3 billion yen on property, plant and equipment, by our arithmetic 5.7% of that cash. It used 800.3 billion yen to buy back shares and 523.1 billion yen to repay long-term borrowings, the filing says.

The company also declared an interim dividend totalling 47,937 million yen and said that “Over the medium- to long-term 100% of excess funds will be allocated to shareholder returns”, according to a separate notice. For comparison, we reported that Amazon, Alphabet, Microsoft and Meta spent $201.9 billion on capex against $175.5 billion of operating cash flow in their latest quarter, by our arithmetic from their releases.

Apple and the Flash Market

The Wall Street Journal wrote on X on 30 October that “AI hyperscalers started outbidding Apple, and chip sellers are the ones laughing now”. We reported earlier that Apple’s 2026 filings warn of rising costs for “storage (NAND) and memory (DRAM)”, in our piece on Apple’s memory costs, and that Apple raised MacBook and iPad prices by up to $500 in June.

Kioxia’s filing says that in the flash memory industry, “while demand from smartphone and PC customers is seeing a downward trend, demand for AI servers at data centers and enterprise customers is increasing”. We also covered a report that SK hynix is weighing a dividend funded by gains on its Kioxia stake.

The Structural Read

As we read Kioxia’s filing, the quarter’s 712.9 billion yen revenue gain came mainly from higher average selling prices on generative-AI data-centre demand, so the flat guide is a pause in yen terms that the company ties to the exchange rate, not to demand.

As we read the peer figures in our earlier pieces, Kioxia, SK hynix and Sandisk all reported operating margins of about 80% in the same quarter, by our arithmetic, while Sandisk’s guide implies about 12.7% further growth and Kioxia’s 0.8%.

As we read the cash-flow statement, Kioxia spent 5.7% of its six-month operating cash on property, plant and equipment, by our arithmetic, and used 800.3 billion yen on buybacks, under a policy that says 100% of excess funds will go to shareholder returns over the medium to long term.

Three Implications

FOR KIOXIA The company guides October-to-December revenue to 2,500.0 billion yen at an assumed 157 yen to the dollar, against 161 yen in the July-to-September quarter, its filing shows.

FOR FLASH BUYERS Kioxia’s filing says demand from smartphone and PC customers is trending down while demand for AI servers at data centres and enterprise customers is increasing.

FOR SHAREHOLDERS Kioxia declared an interim dividend totalling 47,937 million yen and says it will keep a net cash position while buying back shares and paying progressive dividends.

The Business Engineer Lens

This story maps onto the Business Engineer framework The AI Memory Chokepoint.

The framework puts it as “Memory is becoming the new compute. HBM growth is outpacing accelerator demand, making memory the rate-limiting factor in the AI scaling equation.”

As we read it, an 80% operating margin at a flash maker shows the pricing side of that claim reaching NAND as well as HBM. The framework was published in December 2025 and does not discuss Kioxia’s results.

What Is Not Established

Kioxia’s filing does not break out average selling prices or bit shipments by number, and it gives no full-year forecast. The estimates of $15.61 billion and $18.6 billion come from Wall Street Engine’s posts, which do not name a source for them.

The Bottom Line

Kioxia reported July-to-September operating profit of 1,994.7 billion yen on 2,480.0 billion yen of revenue, an 80.4% margin by our arithmetic, then guided the next quarter to 2,500.0 billion yen, citing data-centre demand and a stronger yen.