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Sandisk’s flash revenue rocket accelerates some more Sandisk’s business execs saw SSD revenues rise steeply, up 378 percent Y/Y, to a record $11 billion, beating last quarter’s record $9 billion, which beat the previous quarter’s record $6 billion and this repeated record-breaking is set to continue with a $12 billion+ forecast fir the ext quarter. There was $8.1 billion in GAAP net income, up - wait for it - 7,133 percent. The cash flow numbers are ridiculous. There was $6.4 billion in operating cash flow, vs $488 million a year ago and $5.7 billion free cash flow compared to $448 million a year ago. UK businesses, even high tech ones, and even EU businesses, think such numbers are unreachable fantasies. These Sandisk numbers are no flash in the pan, with all the NAND and DRAM/HBM vendors reporting sustained high growth, with long-term customer supply and buying agreements out to 2028 and. sometimes beyond, giving them confidence in demand durability. CEO and Chairman David Goeckeler said: “We have started fiscal year 2027 with another quarter of strong performance, with robust and growing demand for our products driving outpaced growth in our data center business We are executing on the strategy that we outlined at Investor Day, delivering growing and durable free cash flow through our technology leadership, deep customer partnerships, and disciplined financial management.” Cast your mind back to the dark days when corporate raider Elliott Management was working to get Western Digital (disk + flash) split into WD (disk) and Sandisk (flash) to enhance shareholder value, and we realize that, because of the, at the time unexpected, AI boom, Elliott’s strategy has worked marvellously well. WD recently reported $4.4 billion in quarterly revenues, with Sandisk growing much, much faster. AI needs SSDs more than HDDs. Can this continue? Sandisk’s future expectations are, it says,”reinforced by a structural, AI-driven increase in NAND demand and NBM (new business model) customer signals extending beyond fiscal 2030.” NBMs are long-term supply and purchasing agreements with large customers. It says: ”Customer signals extend beyond fiscal year 2030 through our NBM partnerships; recent engagements with leading AI companies indicate further demand upside.” And this: “NBM pipeline exceeds our supply through the end of the decade.” AI inferencing should provide sustained demand, Sandisk saying: “We expect KV cache to be ~one-third of the AI datacenter flash market by decade-end, with the AI datacenter opportunity approaching the size of today’s NAND industry.” In its view, “TLC serves latency-sensitive KV cache and active datasets; QLC adds density for data lakes, vector databases that power AI search, and retrieval repositories.” Sandisk has three market sectors; datacenter, edge and consumer, and their results were: - Datacenter - $4.8 billion, up 1,682 percent Y/Y - Edge - $5.8 billion, 320 percent higher Y/T - Consumer: $397 million; down 39 percent Y/Y “as the market adjusts to higher pricing” Sandisk reckons “Edge is a large and strategically important market, spanning smartphones, PCs, automotive, tablets, and an expanding range of physical AI applications. Deepening engagements with leading customers reinforce our confidence that Automotive can become one of our largest markets within Edge over time.” It views the consumer market as “a differentiated strategic asset” which “provides a durable foundation for our business. … Its direct connection to the market informs product development and provides early insight into shifts in end-user demand.” You might think this is just rationalizing remaining in a weakening business as the consumer business represents just 3.7 percent of Sandisk’s overall business. Why bother? Surely it can sell consumer NAND bits for more money to datacenter and edge customers. Remember when USB sticks were handed out a supplier events pretty much like confetti? No more. Prices are so high now that the market may never return to those heady days. Sandisk and Kioxia Compared to NAND fab join-venture partner Kioxia, which has a strong datacenter market presence, Sandisk revenues are falling behind, held back by slower growing but historically dominant edge (client) revenues and a declining consumer segment. Goeckeler is rebalancing these three market sectors with a stronger data center component; now the fastest-growing sector. It could overtake the edge market sector in the next quarter or two, with PC sales held back by high memory prices. The share price has grown so strongly that Sandisk announced an eight-for-one forward stock split, effective November 19, 2026, to make stock more accessible, including to employees through its employee stock purchase plan. Kioxia is also having a stock split for the same reasons. The company is making a bet with SK Hynix that it can expand the AI NAND market with high-bandwidth flash (HBF), that stacks layers of 3D-NAND dies with through silicon vias (TSV) connections like HBM to a base logic die and then a high-bandwidth connection to a GPU to beat NVMe SSD bandwidth limitations and latency. So far no GPU supplier has committed to HBF technology. Sandisk said: “HBF reached a milestone in FQ1 with tape-out of our first HBF memory die; samples of our first HBF-based products remain on track for next calendar year.” Sandisk thinks there will be a strong market in calendar year 2027, with datacenter expected again to be the engine of growth, representing over 55 percent of the market in 2027. Datacenter bit demand is expected to grow about 40 percent Y/Y in calendar year 2027, enabled by higher AI-driven capital spending, after more than doubling in 2026. It expects Q2 fy2027 revenues to be $12.4 billion ± $200 million, a 310 percent Y/Y rise at the mid-point.
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