Japanese memory maker Kioxia’s stock price plunges 13%; within a month, it cuts in half from its all-time high

Japan memory chip maker Kioxia’s stock price has been cut in half from its peak, down 52%, with a market value wipeout of at least $185B. Just a month ago, it even overtook Toyota to become the king of market cap on Japan’s stock market.
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One month ago, Kioxia of Kyo-sha (Kioxia) had just created a historic moment for Japan’s stock market. In mid-June, the memory chip maker’s shares surged past Toyota Motor, taking the top spot as Japan’s highest market-cap company. But as the timeline moves into July, the same stock has already dropped sharply—more than 50%—from its all-time high (108,600 yen). At the open today, it plunged 13.09%, trading at 53,980 yen.

This downturn has pushed Kioxia down from the position of Japan’s largest market-cap company to fourth place.

So far this year, Japan’s market-cap leader has changed hands seven times. Toyota Motor, SoftBank Group, and Kioxia have all cycled through that spot in turn. Currently on the throne is Mitsubishi UFJ Financial Group. The pace of rotation is so fast that it shows how jittery and unsettled market sentiment has become.

Three reasons for the plunge: silicon cycle, China competitors, and fast-money exiting

Yuho Tsuboi, chief strategist at Daiwa Securities, told Bloomberg: “The chip industry has always been very sensitive to the silicon cycle (silicon cycle). We’ve seen this kind of pattern many times already.” The silicon cycle. In simple terms, memory chips have clear up-and-down cycles: when demand outstrips supply, prices spike. Once capacity comes online, prices are prone to crash—one of the oldest and most honest rules in the semiconductor industry.

Tsuboi also added that China’s memory manufacturers are rising quickly, and the market is starting to believe that the global memory price uptrend may be slowing. He said: “The expectation that profit growth can keep accelerating has become increasingly hard to sustain. Fast-money investors may have already taken profits and cashed out.”

The background is not hard to understand: Kioxia is Japan’s leading NAND flash memory maker. For many years, it endured some of the most brutal downturns in the memory chip industry’s history, toughing it out for several years. It was not until it went public in 2024 that the situation finally flipped. Riding the AI boom that drove a surge in demand for memory and data storage, the stock continued to surge past Toyota’s position and at one point became the best-performing component in the MSCI World Index.

At the same time, Samsung Electronics and SK hynix have been announcing capacity expansions in sequence, and with players such as China’s CXMT (ChangXin Memory Technologies) joining the fray, the market has started to worry about oversupply and that the momentum behind price hikes may be peaking.

A bigger backdrop is that investors are reassessing the entire chip industry. On Thursday, U.S. chip-sector indexes fell more than 4%. Market doubts about TSMC’s AI investments also overwhelmed the upbeat outlook in its earnings. Money started rotating out of AI concept stocks and into laggards. Investors are now questioning whether the actual returns from massive AI spending can really support today’s high valuations.

Contrary to the signals of leveraged retail and big shareholders exiting

The irony is that analysts have not abandoned Kioxia. Bloomberg reported that the market expects the stock still has about 118% upside over the next year. Japan’s Topix index will adjust its constituent stocks in October this year, which is expected to bring a wave of passive capital inflows.

But on the other hand, Japanese retail investors hold a comparatively high proportion of leveraged positions in Kioxia. If selling pressure accelerates, the downside risk could be magnified. Also, major shareholder Bain Capital has already chosen to exit. Some investors interpret this as meaning that the current semiconductor cycle—and Kioxia’s rally—may be reaching the top.

With an optimistic 118% forecast versus the big shareholder’s decision to leave—both signals coexist at the same time, which exactly reflects just how divided the market is about this memory-stock rally.