June 17, 2024 /SemiMedia/ -- According to reports, in view of the market recovery, Japanese memory chip maker Kioxia stopped production cuts after 20 months and increased the operating rate of its NAND flash memory production lines at its Yokkaichi fab in Mie Prefecture and the Kitakami fab in Iwate Prefecture to 100% this month.

In October 2022, Kioxia announced production cuts of more than 30% to cope with sluggish demand for smartphone products. The start-up time of the new Kitakami fab was also postponed from the original 2023 to at least 2025.

However, market conditions are now improving. While demand for smartphone and PC chips has bottomed out, orders for data center applications are growing. Kioxia reported a net profit of 10.3 billion yen in the January-March quarter of 2024, its first profit in six quarters.

A group of lenders led by Sumitomo Mitsui Banking Corporation, Mitsubishi UFJ Bank and Mizuho Bank have relaxed their stance on Kioxia in light of improved earnings. They have agreed to refinance a 540 billion yen loan that is about to mature and provide a 210 billion yen new credit line. The banks will also help provide the funds needed to replace outdated equipment with the latest equipment.