Sandisk (NASDAQ:SNDK) used its investor event to outline a strategy centered on NAND technology scaling, longer-term customer agreements, AI data-center demand and shareholder cash returns.
Chairman and Chief Executive Officer David Goeckeler said the company has spent the past 18 months strengthening its technology roadmap, supply position and customer relationships following its separation from Western Digital. He said Sandisk now has a debt-free balance sheet, significant cash reserves and a business model designed to generate sustained free cash flow.
Technology roadmap and capital efficiency
Chief Technology Officer Alper Ilkbahar said Sandisk and joint-venture partner Kioxia have expanded their NAND roadmap to 19 generations, including the recently introduced BiCS9 and BiCS10 technologies. Sandisk’s technology strategy prioritizes lateral, logical and architectural scaling over simply adding layers, he said.
Ilkbahar said Sandisk and Kioxia produced 29% of industry bit output from 2021 through 2025 while accounting for 13% of capital expenditures. In 2025, he said, the industry spent an average of 2.66 times more capital than Sandisk and Kioxia to generate comparable output.
BiCS9 combines the BiCS8 memory array with a newer CMOS wafer using hybrid-bonding technology, a configuration designed for hyperscale customers seeking higher performance with limited incremental capital spending. BiCS10, meanwhile, includes a 1-terabit TLC die that began sampling this month and a 2-terabit QLC die that Sandisk described as the world’s highest-density memory chip.
According to Ilkbahar, the BiCS10 2-terabit wafer contains 65% more bits than the comparable BiCS8 die. The company’s BiCS5 through BiCS11 roadmap is expected to support a 27% compound annual growth rate in bits per wafer, based on Sandisk’s projections.
AI infrastructure opportunity
Sandisk’s executives emphasized the growing role of flash storage in AI systems, particularly as the industry shifts its focus from model training toward inference. Chief Product Officer Khurram Ismail said flash is used across AI data lakes, data staging, checkpointing and key-value, or KV, cache applications.
Ismail described persistent KV cache as an increasingly important storage layer that supplements high-bandwidth memory and DRAM. He said longer conversations, agentic AI workflows, multimodal content and larger context windows are expanding the demand for stored inference context.
Sandisk estimates that AI data-center storage demand could reach 1 zettabyte of installed persistent KV-cache capacity by 2030. The company expects KV cache to account for 35% of the AI data-center flash market that year.
The company also said its TLC and QLC enterprise SSDs are qualified with major hyperscalers, OEMs and other customers. Sandisk demonstrated a PCIe Gen 6 enterprise SSD and an E3-form-factor drive with more than 256 terabytes of capacity at the recent Flash Memory Summit.
In internal testing, Ismail said a system using SSDs consumed 75% less energy and delivered 75% higher token throughput than a system relying only on volatile HBM and DDR memory, though he noted results depend on workload characteristics.
Market outlook and customer agreements
Vice President of Market Intelligence Eric Cherrstrom said Sandisk expects the flash market to reach 1.2 zettabytes of shipments in 2026. He forecast the flash market will exceed $300 billion in calendar 2026 and approach $500 billion in 2027, reflecting data-center demand associated with AI infrastructure.
Cherrstrom said data-center storage represented roughly 20% of NAND bit demand in the early 2020s, 30% last year and 50% this year. He also said the industry has structurally reduced capacity from its 2022 peak, while technology migrations continue to support mid- to high-teens production growth.
Chief Financial Officer Luis Visoso provided additional details on Sandisk’s new business models, or NVMs, which are multiyear customer arrangements structured around supply commitments, growing volumes, fixed and variable pricing components, and financial guarantees.
- Sandisk has eight NVM customer engagements, including three U.S. hyperscalers.
- The agreements have an average duration of more than four years, with the longest lasting five years.
- Total contract value is $93.9 billion, with $91.1 billion in remaining performance obligations.
- The agreements include $16.5 billion in financial guarantees, including $2.9 billion in customer deposits and credits.
Visoso said the company expects NVMs to become the largest portion of its business because they offer more predictable demand and less volatility than quarterly price negotiations. He said Sandisk expects revenue to grow at a mid- to high-teens rate from 2028 through 2030, with non-GAAP gross margin around 80%, non-GAAP operating margin around 75% and adjusted free-cash-flow margin around 50%.
For 2027, Sandisk expects bit growth in the mid-teens and modest sequential price increases throughout the year, Visoso said.
Cash returns and emerging memory
Visoso said Sandisk generated $20 billion of revenue, 71.6% gross margin and $8.7 billion of free cash flow during the reported fiscal year, excluding NVM prepayments. In the fourth quarter, the company generated $5 billion of adjusted free cash flow and returned $4.5 billion to shareholders through repurchases.
The board has authorized $20 billion in share repurchases, of which $4.5 billion had been used, leaving $15.5 billion available, Visoso said. He said all excess cash after business investment and balance-sheet needs would be returned to shareholders.
Sandisk also updated investors on High-Bandwidth Flash, or HBF, a technology intended to deliver HBM-like bandwidth with substantially higher capacity for AI inference. Ilkbahar said the company has taped out its first HBF memory die and expects to provide initial HBF inference-device samples to customers next year. HBF revenue was not included in the company’s financial model.
About Sandisk (NASDAQ:SNDK)
SanDisk Corporation offers flash storage solutions. The Company designs, develops and manufactures data storage solutions in a range of form factors using flash memory, controller, firmware and software technologies. The Company operates through flash memory storage products segment. Its solutions include a range of solid state drives (SSD), embedded products, removable cards, universal serial bus (USB), drives, wireless media drives, digital media players, and wafers and components. It offers SSDs for client computing applications, which encompass desktop computers, notebook computers, tablets and other computing devices.
