Morgan Stanley Comments on Kioxia BiCS-10 Mass Production: A Key Step in AI Storage Upgrades

Kioxia initiates mass production of next-generation NAND flash technology, laying a key technical foundation for its competition in the AI-era data center storage market.

On July 3, Kioxia and SanDisk jointly announced the official start of BiCS-10 NAND flash mass production at the K2 fab in Kitakami, and the provision of 1Tb TLC product samples based on this technology to customers.

Morgan Stanley subsequently released a research report, maintaining an "Overweight" rating on Kioxia with a target price of 110k yen. Analysts believe that the official mass production of BiCS-10 means the company's next-generation enterprise SSD products have entered the commercialization stage, expected to further enhance its competitiveness in the AI data center and enterprise storage markets.

However, Morgan Stanley also pointed out that over the next year or so, the company's performance growth will still mainly rely on the previous-generation BiCS-8 products. The true value of BiCS-10 is more reflected in the medium to long term—its commercialization progress will determine whether Kioxia can smoothly increase the proportion of data center and enterprise business and achieve product structure upgrades.

BiCS-10 Comprehensive Performance Upgrade, Designed for AI-Era SSDs

Compared to the previous-generation BiCS-8, BiCS-10 achieves significant improvements in performance, capacity, and energy efficiency.

Specifically, the interface speed has been increased from 3.6Gbps to 4.8Gbps, an improvement of about 33%; bit density per unit area has increased by 59%; write energy efficiency improved by 18%, and read energy efficiency improved by 30%. More importantly, BiCS-10 was designed from the outset to target next-generation AI server requirements, supporting PCIe Gen6 and Gen7 SSDs, providing high-bandwidth, high-throughput storage for large model training and AI inference.

Kioxia stated that the first mass-produced 1Tb TLC products will first be applied to high-performance enterprise SSDs, including the CM series. This series is primarily aimed at the data center market, featuring high throughput and low latency, supporting KV Cache (key-value cache) architecture, and serving as high-speed cache storage in the AI memory hierarchy.

The K2 fab, which handles mass production, commenced production in September 2025 and previously mainly produced BiCS-8 products. With the introduction of BiCS-10, Kioxia and SanDisk plan to further expand the factory's capacity.

Short-term Growth Still Relies on BiCS-8, BiCS-10 Determines Medium to Long-term Competitiveness

Morgan Stanley believes that the market should not view BiCS-10 as a short-term performance driver.

The report expects that by the end of March 2027, BiCS-8 products will account for approximately 80% of Kioxia's overall GB shipments. With more advanced planar scaling technology, CMOS Direct Bonded to Array (CBA) technology, and higher stacking layers, BiCS-8 will remain the main source of the company's revenue growth and unit cost reduction for the next year or more.

In contrast, BiCS-10 undertakes the task of medium to long-term product upgrades.

Currently, data center and enterprise products account for about 30% to 40% of Kioxia's revenue. The company aims to increase this proportion to over 60%, and Morgan Stanley believes that whether this strategic goal can be achieved largely depends on whether BiCS-10 can successfully complete customer qualification, achieve volume shipments, and drive sustained volume growth of high-end SSD products.

Therefore, the focus of future market attention will be on the progress of BiCS-10 customer qualification and the expansion pace of the K2 fab.

Risk Warning and Disclaimer

There are risks in the market, and investment needs to be cautious. This article does not constitute personal investment advice, nor does it take into account the specific investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investment based on this article is at your own risk.