A federal jury in Austin, Texas, returned a verdict on Thursday that could cost Kioxia Holdings Corp. $229 million, ruling that the Japanese memory maker’s flash-memory products infringe a patent owned by Viasat Inc., the company best known for satellite broadband.
The panel, sitting in the U.S. District Court for the Western District of Texas, found that Kioxia violated U.S. Patent No. 8,615,700. The judgment pegs the award at $229,025,021 and structures it as a running royalty, meaning the money compensates Viasat for past infringement through March 30, 2026, rather than for a fixed quantity of chips sold.
For Viasat, the verdict adds a new line to a business that has long operated in the shadow of its satellite operations. The Carlsbad, California-based company holds thousands of patents spanning wireless communications and semiconductor design, and it has pursued licensing claims in federal court before. This particular patent sits in an unusual place for the company: flash memory, the storage technology inside smartphones, laptops, and data-center drives.
For Kioxia, the timing is awkward. The company, spun off from Toshiba Corp. in 2018 and listed on the Tokyo Stock Exchange in late 2023, has spent the past year telling investors that artificial intelligence will pull the NAND flash market out of the deep downturn that began in 2022. Memory prices have since recovered as data-center operators stock up on storage for AI workloads, and Kioxia’s share price has followed. A patent verdict, even one of this size, is unlikely to change that story on its own, but it adds a legal overhang to a company that is still digesting the costs of its Toshiba inheritance.
The NAND business is recovering, but it is recovering from a hole. Suppliers including Kioxia, Samsung Electronics and SK Hynix cut output through 2023 and 2024 to drain inventories, then watched prices climb as hyperscalers and AI startups bought enterprise solid-state drives by the pallet. Analysts estimate that NAND prices more than doubled from their trough, and Kioxia’s factories have been running near capacity. The company has used the rebound to pay down debt left over from the buyout by Bain Capital, and its market value has climbed with the memory cycle.
Patent litigation is a recurring feature of this industry, where fortunes swing with the boom-and-bust cycle that has defined DRAM and NAND for three decades. Big chip makers have sued each other over storage patents for years, and smaller patent owners have found a receptive audience in Texas, a venue long favored by plaintiffs. Verdicts in the hundreds of millions of dollars are not unusual there, and defendants frequently appeal or settle before writing a check. The Western District of Texas, in particular, has developed a reputation for fast trials and large awards in patent cases.
The structure of Thursday’s award leaves open the question of what Kioxia pays if it continues to ship products that rely on the patented technology. Running royalties of this kind typically cover a period of past infringement, with the parties left to negotiate what happens next, or a court to decide. Kioxia hasn’t said whether it will appeal, and people familiar with the matter said the company’s lawyers were reviewing the judgment and weighing post-trial motions.
Analysts said the award, while large in absolute terms, is manageable against the scale of Kioxia’s annual sales and is unlikely by itself to force a change in strategy. What matters more, they said, is whether Viasat presses for an ongoing royalty on future products, a demand that could complicate Kioxia’s cost structure at a time when it is spending heavily to add capacity and to develop next-generation 3D NAND.
The case also lands at a delicate moment for the broader memory sector. AI servers consume memory at a ferocious rate, and suppliers have been raising prices and expanding output after two brutal years. Investors have pushed memory stocks higher on the strength of that recovery, which makes any legal distraction unwelcome for a mid-sized player like Kioxia, whose revenue is a fraction of Samsung’s chip division and whose products are largely interchangeable with rivals’ in the eyes of buyers.
Viasat’s route into this fight is itself a sign of how the memory business has changed. A satellite company holding a flash-memory patent might have seemed like a curiosity a decade ago; today, as licensing becomes a revenue stream for patent holders and a recurring expense for chip makers, the boundaries have blurred. Companies build portfolios not only to protect their own products but to extract payments from others, and jury verdicts have become the enforcement mechanism of choice.
The verdict is one of several high-stakes patent fights working their way through U.S. courts as the AI boom drives demand for memory and the technology inside it. For now, Kioxia is on the losing side of one of those decisions, with a bill of $229 million and a question mark over what comes after it. The company’s lawyers are reviewing the judgment; the market, for its part, barely blinked, a sign that in a recovery this strong, even a nine-figure verdict is a rounding error against the value of the memory cycle.
