Sandisk (SNDK) Bernstein Insights: What's next in tech? - 4th Annual Tech, Media, Telecom Forum summary

Market dynamics and structural changes

• NAND market is undergoing fundamental structural changes, with data center demand projected to become the largest segment by 2026, shifting from a device-centric market to one driven by hyperscalers and AI workloads.

• Demand forecasts for NAND have rapidly increased, with expectations moving from mid-20% to mid/high-60% growth by 2026, prompting new approaches to supply-demand alignment and business practices.

• The market is transitioning from short-term, price-focused agreements to longer-term supply assurance models, aiming to reduce volatility and improve predictability for both suppliers and customers.

• Investment strategies are focused on sustainable, attractive financial models, balancing fixed and variable pricing to perform well across market cycles.

• Capacity additions remain cautious, with ongoing investments in high-teens bit growth, but no immediate acceleration in fab expansion despite strong demand.

Technology and product innovation

• The enterprise SSD portfolio is experiencing significant growth, with recent quarters showing sequential increases of 20–64% in data center sales, and further acceleration expected.

• New products like the Stargate QLC ESSD (up to 128TB) are in qualification, leveraging BiCS8 technology, and are expected to drive incremental growth once they begin shipping.

• BiCS8 is the current focus for technology deployment, with BiCS10 development ongoing but not being accelerated; the roadmap is designed to meet demand with existing plans.

• High Bandwidth Flash (HBF), developed in partnership with SK hynix, targets AI inference workloads, aiming to deliver higher bandwidth and endurance for large-scale models, with first dies expected by year-end and system-level products in customer hands within a year.

• The company’s R&D and manufacturing partnership with Kioxia has been extended, supporting cost leadership and technology advancement through 2034.

Customer relationships and business models

• Long-term agreements are being prioritized, with preference given to customers willing to commit to multi-year supply and pricing arrangements, especially in tight markets.

• The company is actively collaborating with customers and ecosystem partners to align technology development with evolving AI and data center requirements.

• The business model is evolving to provide more predictable, consistent supply and financial outcomes, moving away from traditional cyclical volatility.

• Competitive threats, including from Chinese manufacturers, are factored into growth and supply planning, but current strategies remain focused on sustainable, high-value growth.

• The consumer franchise remains strong, with ongoing investment in brand and reach, complementing the enterprise and data center focus.