SanDisk Secures Long-Term Contracts to Stabilize Revenue Amid Memory Market Volatility
SanDisk (SNDK) has secured long-term supply agreements with eight data center and edge customers, expected to generate at least $93.9 billion in revenue over their lifetimes. These contracts include price floors that protect the company from sharp declines in memory prices, which historically have caused significant swings in its profitability. The agreements span multiyear terms—up to five years—and are backed by financial guarantees totaling $16.5 billion. The move comes after SanDisk's recent strong performance, with a 175% year-over-year revenue increase and net income of $6.9 billion for the latest quarter driven largely by rising memory prices. However, investors remain cautious about sustaining these gains as market conditions could shift again. The company expects more than half of its fiscal 2027 shipments to be covered under these contracts. While SanDisk's CFO stated that attractive margins can still be achieved at floor pricing levels, the exact price floors and how much they fall below current prices remain undisclosed. This new business model aims to provide stability in an otherwise cyclical industry.
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