Holdings Corp. posted a 22-fold surge in operating profit and announced an interim dividend, buoyed by data center operators’ willingness to pay big for flash memory chips.

The Tokyo-based rival to Samsung Electronics Co., SK Hynix Inc. and Micron Technology Inc. said operating profit was ¥1.99 trillion ($12.7 billion) in the September quarter, in line with the average analyst estimate. It announced an interim dividend of ¥90 per share — its first dividend ever.

Kioxia is benefiting from soaring demand from big tech providers that’s driving up average prices of NAND flash memory chips. For the current quarter, the company expects an operating profit of ¥2 trillion, below estimates for ¥2.35 trillion.

Emboldened by lucrative multiyear contracts from the likes of Meta Platforms Inc. and Amazon.com Inc., chipmakers are hurrying to build new production capacity and capitalize on shortages projected to last through at least 2027. Kioxia is preparing to float its own American depositary receipts next year to help fund the more than ¥5 trillion in capital spending it plans in Japan with production partner Sandisk Corp. over the next six years. Bloomberg News previously reported a US listing could raise at least $10 billion.

The ADR listing, aimed at broadening Kioxia’s investor base beyond Asia, is a bet that the current demand for hardware needed to support artificial intelligence services would outrun persisting questions about circular financing and the sustainability of feverish spending on data centers.

Like SK Hynix, which listed ADRs earlier this year, Kioxia seeks to temper volatility and strengthen pipelines with financial institutions outside Asia through an official debut in the US. That push has coincided with aggressive share buybacks at home: In August, Kioxia completed an ¥800 billion buyback 10 days after announcing it.

Shares of Kioxia have tumbled around 60% from their peak in June. Samsung and SK Hynix’s bullish projections briefly boosted chip-related stocks this week, only to see them tumble in a broad selloff Friday.

Kioxia, which for years struggled with volatile demand from consumer electronics companies including Apple Inc., is betting that AI will transform the market for flash memory chips. While AI may run on graphics processing units such as Nvidia Corp.’s, it increasingly depends on flash memory to store and feed vast amounts of data those chips consume.

Data centers comprise a growing portion of business at Kioxia, which hopes that such reliable customers will eventually make up more than 60% of overall sales. The company aims to secure long-term agreements from hyperscalers for half of projected shipments for 2028 and beyond, to give it greater visibility on demand.

The company is now developing new solid-state drives that would sit closer to AI accelerators, and provide an extra tier of memory to reduce the amount of data that has to fit in expensive DRAM-based high-bandwidth memory.

Because better-funded competitors are focusing on the lucrative HBM market, that’s helped Kioxia command astronomic margins on its high-density NAND chips. SK Hynix earned a big windfall from its indirect stake in Kioxia this year and continues to hold bonds that can be converted into a sizable stake in the Japanese chipmaker.

Kioxia’s NAND market share trails those of Samsung and SK Hynix, which are better placed to bundle storage chips with their HBM products. Kioxia, which does not manufacture DRAM, is not in the HBM market.

Tight supply constraints are also creating an opening for China’s Yangtze Memory Technologies Co. in conventional flash memory products. YMTC moved ahead of Kioxia and Micron to take the No. 3 slot in NAND shipment volume in the June quarter, according to Counterpoint Research.