Sandisk (SNDK) Citi’s 2026 Global TMT Conference summary

Forward-looking statements and business model evolution

• Management discussed forward-looking statements regarding technology, product portfolio, business plans, market trends, and financial results, with reference to non-GAAP financials and associated reconciliations.

• New business models (NBMs) now account for 50% of bits sold, with a target of 2/3 by fiscal 2028 and a long-term goal of 70–80% by 2030, focusing on strategic customers for durable, attractive business.

• Some business will remain outside NBMs, sold at spot prices, as not all customers will adopt the new model.

• Margins remain strong, with NBMs providing floor and ceiling pricing, ensuring attractive gross margins even at lower levels.

• Customer relationships have deepened, with contract extensions and volume increases, moving from tactical vendor to strategic partner.

Technology roadmap and competitive positioning

• Data center business is growing, currently at 38% of revenue, with expectations to reach 50% as the market evolves.

• Product innovation includes BiCS8, BiCS10, and BiCS11 technologies, with a focus on performance, density, and energy efficiency.

• Competitive advantage is driven by CapEx efficiency and continuous cost reduction, especially as more business shifts to data center products.

• Node transitions, not wafer additions, drive bit growth, with bonding technology increasing R&D productivity and flexibility.

• Energy efficiency is increasingly important for hyperscalers, alongside bandwidth and density.

Market trends, demand, and investment strategy

• Edge business remains important, with a shift toward higher-performing models as low-end, subsidized products become less viable.

• Expectation of low single-digit unit growth and higher content growth in edge markets, with AI at the edge not yet a major driver.

• Industry bit growth is projected at mid-to-high teens, with a cautious approach to capacity expansion to avoid past overbuild cycles.

• AI and data center demand are driving market expansion from $50 billion to $300 billion, with a path to $500 billion by 2027.

• Investments are focused on supporting mid-to-high teens growth, with CapEx and OpEx aligned to technology and market needs.