Financial Data and Key Metrics Changes - The company reported strong pricing increases for both DRAM and NAND, with NAND prices increasing more than DRAM prices in the second quarter of 2026 [27] - The company expects modest volume growth for both DRAM and NAND in the third quarter, driven by supply constraints [28] Business Line Data and Key Metrics Changes - NAND demand is robust, particularly driven by data center growth and AI server requirements, with the company unable to meet the current demand levels [10][11] - DRAM supply impacts from new projects are expected to materialize towards fiscal year 2028, indicating continued tight supply conditions beyond 2026 [18][19] Market Data and Key Metrics Changes - The demand for NAND is significantly undersupplied, with growth driven by KV cache applications and shortages in HDDs [47] - The company anticipates that the demand forecast from customers for 2026 and 2027 continues to escalate, despite efforts to increase supply [19] Company Strategy and Development Direction - The company is expanding its NAND capacity by adding clean room space at existing sites, reflecting confidence in market demand [9][10] - The focus remains on disciplined capital expenditures while addressing the growing demand in the data center SSD space [12] Management's Comments on Operating Environment and Future Outlook - Management expressed that the supply constraints are expected to persist through 2026 and into 2027, with significant improvements in cleanroom space availability only anticipated by 2028 [67][70] - The company is optimistic about the long-term demand for DRAM and NAND, driven by AI and other emerging technologies, but acknowledges the challenges in meeting this demand [63][70] Other Important Information - The company has increased its capital expenditure outlook for FY 2026 to over $25 billion, primarily driven by DRAM and HBM investments [50] - Startup costs related to new fabs are expected to impact margins, but the company is managing these costs effectively [79] Q&A Session Summary Question: Can you discuss the decision to add greenfield capacity for NAND? - Management indicated that the decision was based on confidence in market demand and the need for additional clean room space for technology transitions [9][10] Question: How are you modeling the impact of new DRAM supply on pricing? - Management stated that new supply impacts will be felt in fiscal year 2028, and they expect tight supply conditions to continue beyond 2026 [18][19] Question: What is the outlook for NAND demand from KV cache applications? - Management confirmed that KV cache is a significant driver of demand, contributing to the overall growth in the data center SSD market [46] Question: How do you view the balance between HBM and non-HBM allocations? - Management emphasized that allocations are strategic and aimed at meeting customer needs, with both HBM and non-HBM margins being robust [40] Question: What is the expected CapEx mix for DRAM and NAND? - Management indicated that CapEx will be dominated by DRAM and HBM, with NAND expected to increase but remain a smaller portion of the overall spend [52] Question: How do you see the long-term bit growth for DRAM and NAND? - Management did not provide new long-term bit growth numbers but acknowledged that current forecasts are robust due to strong demand [63] Question: When do you expect to have enough cleanroom capacity to meet demand? - Management stated that significant improvements in cleanroom capacity are not expected until 2028, with ongoing evaluation of demand drivers [67][70]