Kioxia has lost two-thirds of its market capitalisation since its peak in June

The Japanese NAND memory manufacturer, once Japan’s largest company by market capitalisation, is suffering from rising interest rates, which are putting pressure on data centres, and from increasing competition from Chinese rivals.

In June, driven by demand for memory from AI infrastructure, Kioxia became Japan's most valuable listed company. Four months later, its capitalization is only about a third of that peak, according to Nikkei Asia, even though its April-September results, due on October 30, are expected to show a historic profit.

Rates and Chinese competition

Two concerns weigh on the stock. On the one hand, the rise in rates is increasing the cost of the debt that finances data centers and threatening their business model, and therefore the future demand for memory chips. On the other hand, Chinese manufacturers are getting closer: YMTC is preparing an IPO in Shanghai of about $4.9 billion, and CXMT is said to have overtaken SK Hynix and Micron in profit margin on memory. Individuals who bought the stock on credit are under pressure.