SanDisk Outlines AI Storage Strategy, Signs $93.9 Billion in Long-Term Contracts, HBF Samples Expected in 2027

ME AI message: In its latest Investor Day materials, SanDisk stated that AI data center construction is transforming demand structures in the flash industry. The company expects the Flash market size to reach approximately 1.2 ZB by 2026, with data centers surpassing Edge as the largest demand source; by 2027, the industry’s total addressable market (TAM) revenue is projected to surge from a historical cyclical average of around $60 billion to over $300 billion, nearing $500 billion. The core of this narrative lies in AI inference. SanDisk believes that long-context, RAG, multimodal, and agent-based applications will drive demand for KV Cache, elevating SSDs from low-value storage components to strategic elements within AI infrastructure. The company even refers to SSDs as “Token Batteries,” meaning they store completed computational results to reduce redundant calculations, lower energy consumption, and improve throughput. On the business model front, SanDisk emphasizes long-term agreements with major customers under new commercial arrangements designed to mitigate the traditional cyclical volatility of the NAND industry. The company notes that eight customers are currently participating in these arrangements, with an average contract term exceeding four years. By FY2027, approximately half of its bit supply will be covered under this model, rising to about two-thirds by FY2028. The total contract value under these agreements, calculated at floor prices, amounts to $93.9 billion, with remaining performance obligations of $91.1 billion and $16.5 billion in financial guarantees supporting them. Financial targets are equally aggressive. SanDisk forecasts full-year FY2026 revenue of $20 billion, representing a 175% year-over-year increase; a Non-GAAP gross margin of 71.6%; and adjusted free cash flow of $8.7 billion. Its long-term model for FY2028 to FY2030 projects sustained mid- to high-double-digit revenue growth, a Non-GAAP gross margin of approximately 80%, an operating margin of around 75%, and an adjusted free cash flow margin of roughly 50%. The next longer-term theme is HBF (High-Bandwidth Flash). SanDisk says HBF will address the “memory wall” challenge in large model inference, offering up to 8 to 16 times the capacity of HBM at comparable read bandwidth. The company anticipates the first HBF inference product samples will emerge in 2027, enabling the market to continue re-evaluating its long-term potential based on evolving AI memory architectures. (Source: BlockBeats)