Joint plan and dollar scale
Sandisk and its manufacturing partner Kioxia said Thursday they plan to invest more than $31 billion in Japan through 2032, earmarking the funds for infrastructure at the Yokkaichi and Kitakami plants and for related technology development. The two companies have invested more than $50 billion in Japan across more than 25 years, according to the announcement; the new plan would spend about 60% of that sum again in roughly six years, and the announcement frames the figures as floors. The plan is contingent on Japanese government support, and CEOs from both companies met with Japanese Prime Minister Sanae Takaichi on the same day to discuss potential government financing, with reports indicating the partners are seeking public backing for roughly one-third of the overall investment. The investment, reported at approximately 5 trillion yen, is tied explicitly to surging demand for high-density flash memory driven by AI workloads.
Yokkaichi, Kitakami and the new Fab3
The spending will flow to two existing facilities: Yokkaichi in Mie Prefecture and Kitakami in Iwate Prefecture, where Kioxia and Sandisk manufacture through the joint venture structure known as Flash Ventures, which operates eight facilities in Japan (six in Yokkaichi and two in Kitakami). The centerpiece of the announcement is a new fabrication plant, Fab3, at the Kitakami site, with an estimated price tag of about 1.8 trillion yen, or roughly $11.3 billion — more than a third of the total package — and operations expected to begin in fiscal year 2029 or later. In January, the partners extended the Flash Ventures framework through December 2034, and Kioxia owns the facilities while Sandisk holds a 49.9% stake in the joint venture entities, with each side receiving roughly half of the production. Sandisk's annual report says it is obligated to finance between 49.9% and 50% of the joint ventures' capital expenditures to the extent that the joint ventures' own cash flow cannot cover them, and neither company has detailed its share of the new plan.
Tension with Sandisk's stated capex posture
The plan's scale sits in contrast to what Sandisk management told investors roughly three weeks before the announcement: that the company is increasing supply through technology improvements rather than large capacity expansions, with capital expenditures falling as a percentage of revenue. The plan is joint rather than a standalone $31 billion check from Sandisk, and if about half of the investment flows through Flash Ventures, something close to $1.3 billion a year would fall on Sandisk before any Japanese government contribution.
BiCS Flash and the NAND market context
Kioxia and Sandisk co-develop BiCS Flash, Kioxia's 3D NAND technology, with the 10th-generation product co-developed by both companies. Historically, Kioxia and Western Digital — Sandisk's parent until its recent separation — have been the second-largest NAND producers globally behind Samsung.
Other developments
Separately, Nissay Asset Management Corp Japan increased its position in Sandisk by 4,206.6% in the second quarter, ending the period with 24,763 shares valued at $56.3 million, according to a recent SEC filing. Sandisk also reported stronger-than-expected quarterly results, with EPS of $39.25 versus the $33.28 consensus and revenue of $8.96 billion, up 371.6% year over year, and the company's board authorized a $14 billion share repurchase program on August 5 permitting the buyback of up to 6.6% of its shares.
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