Core Viewpoint - Kioxia Holdings reported a significant decline in adjusted net profit for the second fiscal quarter, dropping over 60% year-on-year, raising concerns about the overall health of the storage industry [3][9]. Financial Performance - Kioxia's net profit for the quarter was 41.7 billion yen (approximately 284 million USD), a substantial decrease compared to the same period last year [3][9]. - The company's performance was impacted by both declining revenues and rising costs, leading to market worries about the storage sector's outlook [3][9]. Market Impact - Following Kioxia's earnings report, stock prices of its U.S. peers, including Seagate, Western Digital, and Micron Technology, experienced significant declines, with Seagate down 7.31%, Western Digital down 5.29%, and Micron down 3.25% [6]. - Despite these declines, the overall year-to-date performance of these stocks had been strong, with Western Digital's stock up 269%, leading the S&P 500 index [6][9]. Supply Chain Issues - Market analysts suggest that Kioxia's poor performance may be linked to its fixed-price supply agreement with Apple for mobile NAND chips, which prevented the company from benefiting from rising spot market prices [10][12]. - This pricing mechanism has made Kioxia an outlier in an otherwise booming market driven by AI and cloud computing investments [9][12].