NAND maker Kioxia's shares fell up to 15% on Monday after its cautious Q3 outlook disappointed investors, raising concerns that AI-driven growth may be slowing

The cost of high-capacity solid-state drives may increase as Kioxia's cautious outlook suggests a potential slowdown in AI-driven demand for NAND flash memory.

Kioxia Holdings Corp. saw its shares drop as much as 15% on Monday, marking its largest decline in three months. This significant fall followed the Japanese memory chip maker's release of a cautious third-quarter outlook. Investors reacted negatively, interpreting the guidance as a potential signal that the rapid growth fueled by artificial intelligence demand might be decelerating. The company's performance and future projections are being closely watched as a bellwether for the broader AI-driven semiconductor market.

Kioxia's subdued forecast raises questions about the sustainability of the current AI boom's impact on the memory market. While demand for AI infrastructure has been a powerful tailwind, this guidance implies that inventory adjustments or market saturation could begin to affect chip manufacturers. Investors will be scrutinizing other NAND and DRAM producers for similar signals in their upcoming earnings reports.

This development could signal a shift in the AI hardware supply chain, potentially impacting not only memory suppliers but also the foundries and chip designers that support AI development. Companies heavily reliant on a continuous surge in AI chip orders may need to recalibrate their own growth expectations and supply chain strategies if Kioxia's cautious tone proves to be a widespread trend.