Kioxia Says Flash Memory Prices Are Stalling; SanDisk Falls 13%

Chip stocks sold off hard in the U.S. on Friday. The Philadelphia Semiconductor Index fell more than 7% intraday, its biggest drop since June 5. The Nasdaq Composite closed down 2.84%.

The first leg of the selloff was Intel's outlook, released Thursday evening. The second came from Tokyo that morning: flash memory maker Kioxia said the price surge is nearing its end.

Kioxia Said Its Profit Growth Has Stopped

Kioxia reported adjusted operating profit of ¥1.99 trillion (about $12.6B) for July-September. That matched the ¥1.97 trillion estimate. Amounts are converted at roughly ¥157.5 per dollar.

The problem was the October-December outlook. The company expects operating profit of ¥2 trillion ($12.7B), against a Bloomberg-compiled estimate of ¥2.35 trillion ($14.9B). The guidance implies almost no profit growth from the previous quarter.

The reason is price. Average selling prices rose 70% in April-June and about 25% in July-September. For October-December, the increase is expected to slow to single digits, with shipments flat.

Finance chief Akira Menju said it is unclear whether prices will keep rising in fiscal 2027, even gradually. Kenji Yasui of UBS Securities Japan noted how tight supply looks and asked: "Are you just being conservative?"

Kioxia did not report a loss or a revenue decline. It reported only that its profit has stopped growing.

Why a Record Profit Did Not Protect the Stock

Memory stocks are priced on how fast profit grows, not on its level. In a high-margin business nearly all of a price increase falls to profit; when the increase stops, profit growth stops just as fast.

That is why the market gives memory makers low multiples. Mizuho says SanDisk trades at about 8 times fiscal 2027 earnings, versus around 17 for the semiconductor index. A low P/E signals that the market doubts the profit will last.

SanDisk Beat on Every Line

SanDisk reported first-quarter results Thursday evening. Revenue of $11.03B beat estimates by 3.1%, and adjusted EPS of $49.51 beat by 6.7%.

Sequential revenue growth is slowing from 51% to 23%, and to 12% in the guidance. CFO Luis Visoso said about 60% of last quarter's growth came from volume and 40% from price.

The stock fell 3.8% after hours and closed Friday at $1,150.99. Investing.com tied the drop to Kioxia's warning, Intel's outlook and the broader AI selloff; sources do not separate these effects.

Kioxia shares fell 7.14% in Tokyo before the results. After them, they dropped another 11% on Germany's Tradegate, leaving the stock about 60% below its June peak.

The Part That Does Not Fit

Kioxia calls its price outlook uncertain while also saying supply is tight. It says buyers are lined up for all of next year's production capacity. Long-term contracts with large cloud companies cover more than half of its 2028 shipments.

At SanDisk, long-term agreements cover about half of fiscal 2027 bits and two-thirds of fiscal 2028. Price growth is slowing, but demand is not falling; Friday's drop sold the speed of pricing, not its direction.

What It Means for Investors

• The market had already priced the record profits; what it had not priced was NAND price growth falling from 70% to single digits in two quarters.
• SanDisk, Western Digital, Seagate and Micron ride the same price cycle, and Kioxia's outlook pulls down growth assumptions for all of them.
• The number to watch is whether price's share of SanDisk's growth drops below 40% in its second-quarter results in late January.
• The risk to this view is tight supply reaccelerating prices in 2027, in which case today's low multiples will look cheap in hindsight.

Our guide How to Read Earnings Day explains why a stock can move against good results. SanDisk's full results are in our earnings analysis.

Sources: Kioxia's results are based on the company's investor relations notice dated October 30, 2026. Guidance, estimates and executive comments come from Investing.com, Briefs and Seoul Economic Daily. The estimate uses Bloomberg's ¥2.35 trillion compilation; Investing.com cites ¥2.32 trillion. SanDisk figures and the close use the same definitions as our earnings analysis. Intraday declines are not closes; they are midsession data from TheStreet and Investing.com.