SanDisk, a US flash memory and SSD maker spun out of Western Digital last year, closed at US$1,409.98 on May 6, with shares surging nearly 430% this year as investors bet on rising demand for AI server storage, according to Chosun Daily.
Long-Term Supply Contracts Secure Revenue
The company recently signed five supply deals worth approximately US$42 billion and lasting as long as five years, giving it a larger base of contracted sales and upfront payments. SanDisk said more than one-third of its fiscal 2027 production is already committed to these agreements.
Strong Fiscal Q3 Performance
SanDisk reported fiscal third-quarter revenue of US$5.95 billion, up 251% year on year, with a 78.4% gross margin. This performance significantly exceeded analyst expectations, which had ranged from US$4.4 billion to US$4.8 billion in revenue with margins of 65% to 67%.
The revenue jump reflects a sharp rebound following a difficult period in early 2025, when the enterprise solid-state drive (SSD) market for data-center and corporate buyers faced excess inventory and a nearly 20% drop in average selling prices.
Market Implications and Analyst Perspective
Analysts noted that the long-term contracts could reduce the usual swings in NAND pricing, potentially steadying the memory market’s historically volatile boom-bust cycles. The locked-in supply agreements provide SanDisk and its largest customers—primarily hyperscalers building AI infrastructure—with greater certainty in planning.
However, analysts also warned that supply growth or slower AI spending could still pressure profits. Market concentration remains a consideration, with one market-research report estimating the combined share of Samsung, Western Digital, Micron, and Intel at approximately 70% of the NAND flash market.
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