SanDisk CEO: Traditional NAND Pricing Model 'Highly Disruptive', New Business Model Contracts Already $42 Billion

At the annual technology conference of JPMorgan Chase, Sandisk's Chairman and CEO David Goeckeler criticized the traditional operation mode of the entire NAND flash memory industry and elaborated on a long-term contract system that he believed could fundamentally rewrite the rules of the industry. This memory chip company, which became independently listed from Western Digital at the end of last year, is trying to prove to the market with a new business logic that it is not just another storage manufacturer constrained by cycles.

What changes are happening in SanDisk's revenue structure?

The data center business grew by more than 200% sequentially in the fiscal quarter ending in March, and its proportion of the company's overall revenue leaped to 25%. This means that the data center is no longer the "third business" of SanDisk, but has become a core growth pole that is on par with consumer and edge, and even begins to lead the company's narrative.

The management indicated that it will continue to focus on the enterprise-level solid-state drive (eSSD) product strategy, and it is expected that this share will further expand. The synchronous acceleration of mass production for BiCS8 advanced process nodes provides the confidence for SanDisk to establish a technological barrier in the data center market.

Why does SanDisk believe that the pricing logic of the entire NAND industry needs to be overhauled?

Goeckeler is merciless about the traditional NAND industry model — quarterly spot clearing pricing, phased inventory monetization cycles, and the long-term mismatch between supply and demand in contract terms, which he characterizes as a "highly destructive" industry malady.

The adverse effects of this logic are obvious to all: manufacturers frantically expand production when prices soar, and collectively cut losses when they plummet. The entire industry chain repeatedly consumes internally in the "pig cycle." The design of the New Business Model (NBM) is precisely to break this cycle, and the management positions it as the core pillar of the company's transformation.

What are the terms in the NBM contract that truly convince customers and investors?

The contract generally locks in a supply commitment of 3 to 5 years, with the near-term price basically fixed, and introduces a price range structure for the long term to ensure that both parties can share the benefits of price gains and avoid extreme downside risks at the same time.

The most highly regarded is the breach guarantee design — Goeckeler calls it "prenup-style" arrangements: if either party withdraws, the compensation payment is automatically executed by SanDisk or a third-party financial institution under preset conditions, "without the need for legal action, without any negotiation".

The NBM negotiations are usually initiated by the customers, with the demand for supply guarantee rather than price preferences — this itself indicates the market's strong desire for certainty.

After 42 billion, how much room for extension does this story still have?

As of the April financial statements, SanDisk has signed 5 NBM agreements, with the total life cycle value of the first 3 contracts amounting to 42 billion dollars, and more than one-third of the bit output for FY2027 has been locked into customer certainty commitments.

The management refused to update the negotiation progress before the next financial report, but confirmed that they are actively promoting with more customers in the data center and edge computing fields. The management deliberately emphasized the diversity of the portfolio — crossing different terminal markets, staggering contract expirations, avoiding being overly concentrated on a single track, which is itself a hedging logic.

The consumer business, due to its unique structural nature, is explicitly excluded from the NBM framework, but the management stated that the strategic commitment remains unchanged. On the cost side, SanDisk still maintains its annual cost reduction target of a low double-digit percentage per bit and has written it into all signed contracts — but the management also released a thought-provoking signal: cost is no longer the primary narrative framework, pricing power and long-cycle certainty are the true axes of SanDisk's new story.<\p>