A company has overtaken Toyota to become the most valuable on Japan's stock market by market capitalization. It is Kioxia, the world's third-largest NAND flash maker, whose shares have soared 857% this year. Riding the boom in artificial intelligence (AI) chips, the company has emerged as a new star of the Japanese stock market.
Korean and Japanese stock markets have recently moved in similar patterns, driven by expectations for growth in the AI chip industry, according to the financial investment industry Monday. As global capital concentrates on semiconductor supply chain companies expected to benefit from expanded AI infrastructure investment, the corporate values of leading stocks in both countries have risen together.
◇Kioxia Tops Market Cap Rankings, Overtaking Toyota
At the center of this rally is Kioxia Holdings, a Japanese NAND flash memory company. Spun off from Toshiba's former memory business division, Kioxia leads the global NAND flash market alongside Samsung Electronics and SK hynix.
As U.S. Big Tech companies have recently expanded their adoption of agentic AI and retrieval-augmented generation (RAG) technologies, demand for semiconductor-based storage devices (SSDs) for high-capacity AI servers has surged, and Kioxia has emerged as a leading beneficiary of this rally.
Kioxia shares have indeed jumped 828.6% this year, putting the company atop Japan's stock market in market capitalization. It overtook Toyota Motor, the previous No. 1. Investor interest has been so concentrated that average daily trading value has exceeded 3 trillion yen (about 28.55 trillion won).
The market projects Kioxia's consolidated operating profit for the fiscal year ending March 2027 will reach about 7 trillion yen (about 66.6141 trillion won), an eightfold increase from the previous year. This far exceeds the 3 trillion yen operating profit forecast presented by Toyota.
In response, major Japanese brokerage SMBC Nikko Securities raised its target price for Kioxia roughly threefold, from 48,000 yen to 126,000 yen (about 1.2 million won).
◇Korea Still Leads NAND Market Share
However, Kioxia's surge does not immediately translate into market dominance. Samsung Electronics holds the top NAND flash market share at 29%, followed by SK hynix at 18%. While the two companies account for about half of the global market, Kioxia's share remains at around 14%.
In terms of corporate size (about 58.88 trillion won), there remains a considerable gap compared with Samsung Electronics (about 2,064 trillion won) and SK hynix (about 2,082 trillion won). This is why analysts say growth expectations from expanding AI demand have been strongly reflected in the share price.
Kioxia's surge is also working as good news for SK hynix. In 2018, SK hynix invested about 4 trillion won in Kioxia through a Korea-U.S.-Japan consortium. As Kioxia's corporate value soars, the value of SK hynix's stake and its equity-method valuation gains are also expected to increase.
However, the securities sector has also raised caution over the phenomenon of capital concentrating excessively in specific AI chip stocks in both Korean and Japanese markets. The point is that since the current share price rise is premised on a high-growth scenario for the AI industry, volatility could increase if market expectations decline or the macroeconomic environment deteriorates.
◇"Should I Buy Kioxia Too?"—ETFs for Those Wary of Direct Investment
So how can domestic investors invest in Kioxia?
First, there is the method of directly purchasing Kioxia shares on the Japanese stock market. However, since the minimum trading unit on the Japanese market is 100 shares, about 100 million won is required at the current share price. Small-scale investment is also possible by using fractional share trading services offered by some brokerages, including Shinhan Securities.
Another method is investing in exchange-traded funds (ETFs) that include Kioxia. Representative examples in Korea include MIDAS Japan Tech Active, KODEX Asia AI Semiconductor exCHINA Active, and ACE Japan Semiconductor. In the United States, the Roundhill Memory ETF (DRAM), and in Japan, the NEXT FUNDS Nikkei Semiconductor ETF (200A) hold Kioxia as a major component.
