NAND market

Search documents
SanDisk Gets Wall Street Boost As Rising Chip Prices, Smart Spending Boosts Margins
Benzingaยท 2025-06-18 18:28
Core Viewpoint - BofA Securities analyst Wamsi Mohan initiated coverage on SanDisk with a Buy rating and a price target of $61, highlighting the company's strong position in the NAND flash technology market [1] Group 1: Market Dynamics - The near-term supply-demand balance is improving, with supply curtailment observed in the first quarter, leading to a more positive pricing environment for NAND in the upcoming quarters [1] - The NAND flash industry remains fragmented with over six players, but there is potential for consolidation in the long term [2] - SanDisk aims to implement more disciplined pricing strategies in a capital expenditure-heavy industry characterized by historically low returns [2] Group 2: Financial Projections - Mohan projects fiscal 2025 revenue for SanDisk at $7.29 billion and earnings per share (EPS) at $2.75 [5] - SanDisk's stock price increased by 6.04% to $46.76 at the time of publication [5] Group 3: Competitive Positioning - SanDisk's operating margin has shown resilience during downturns due to effective capacity management and a favorable customer mix [4] - The company is expanding its product mix towards embedded solid-state drives (eSSDs), which represented only 15% of sales in the second half of 2024 [4] - SanDisk's joint venture with Kioxia allows for shared capital expenditure costs, which have surged to as high as $30 billion in recent years [3] Group 4: Future Outlook - There is potential for significant valuation rerating if pricing trends improve structurally in the NAND industry, although competition in China poses a concern [3] - The company is expected to outperform other NAND flash competitors in terms of through-cycle operating profit in the coming years [4]
Sandisk Corporation(SNDK) - 2025 Q3 - Earnings Call Transcript
2025-05-07 21:32
Financial Data and Key Metrics Changes - Revenue for the third quarter was $1.7 billion, down 10% sequentially and down 1% year over year [8][17] - Non-GAAP EPS was a loss of $0.30 per share, at the high end of the guidance range [19] - Cash and cash equivalents increased from $1.3 billion to $1.5 billion [19] Business Line Data and Key Metrics Changes - Client revenue was $927 million, down 10% sequentially [17] - Consumer revenue was $571 million, down 5% quarter over quarter [17] - Cloud revenue was $197 million, down 21% sequentially [17] - ASPs were down high single digits, reflecting continued oversupply in the market [9][18] Market Data and Key Metrics Changes - Analysts estimate cloud CapEx from major hyperscale providers grew over 50% to approximately $240 billion in calendar year 2024, expected to reach approximately $330 billion in 2025 [14] - Bit allocation to enterprise SSD applications represented 12% of total bits this quarter, up from 8% in the same quarter of the prior year [15] Company Strategy and Development Direction - The company aims to create value for customers and shareholders while reaffirming leadership in the NAND market [5] - Focus on capital discipline and driving higher returns on invested capital [7] - Plans to reduce wafer production to align supply with demand and enable sustainable pricing [9] Management's Comments on Operating Environment and Future Outlook - Management sees an undersupplied market through the end of next year, with expectations for pricing to start increasing [29] - Positive signs include strengthening transactional markets and encouraging customer engagements [21] - The company expects demand to strengthen throughout the year, driven by various factors including the Windows 10 end of life and post-pandemic PC refresh [21] Other Important Information - The company recorded a non-cash impairment charge of $1.83 billion for goodwill, reducing the goodwill balance to $5 billion [19] - Non-GAAP gross margin for the third quarter was 22.7%, with expectations for the fourth quarter to be between 25.5% and 27% [18][22] Q&A Session Summary Question: Can you discuss the supply-demand situation and the actions taken? - Management sees an undersupplied market through the end of next year and is taking prudent actions to balance supply and demand [29][30] Question: How is the enterprise SSD market performing? - Demand has been consistent, with expectations for significant revenue growth in the enterprise SSD segment [35] Question: What are the expectations for NAND bit shipments? - The company expects NAND bit volume to grow low double digits this calendar year, with good visibility across various markets [57][60] Question: How does the company view pricing trends? - Management believes the market is turning, with price increases expected due to improved demand across the board [82] Question: What is the impact of the yen exchange rate on costs? - The front end is exposed to the yen, but not all costs are yen-denominated, which should be considered in modeling [85]
Sandisk Corporation(SNDK) - 2025 Q3 - Earnings Call Transcript
2025-05-07 21:30
Financial Data and Key Metrics Changes - Revenue for the third quarter was $1.7 billion, down 10% sequentially and down 1% year over year [7][15] - Non-GAAP EPS was a loss of $0.30 per share, at the high end of the guidance range [18] - Cash and cash equivalents increased from $1.3 billion to $1.5 billion [18] Business Line Data and Key Metrics Changes - Client revenue was $927 million, down 10% sequentially [16] - Consumer revenue was $571 million, down 5% quarter over quarter [16] - Cloud revenue was $197 million, down 21% sequentially [16] - ASPs were down high single digits, reflecting continued oversupply in the market [8] Market Data and Key Metrics Changes - Analysts estimate cloud CapEx from major hyperscale providers grew over 50% to approximately $240 billion in calendar year 2024, expected to reach approximately $330 billion in 2025, a 40% increase [13] - Bit allocation to enterprise SSD applications increased to 12% this quarter, up from 8% in the same quarter of the prior year [13] Company Strategy and Development Direction - The company aims to create value for customers and shareholders while reaffirming leadership in the NAND market [5] - Focus on capital discipline and driving higher returns on invested capital [6] - Plans to reduce wafer production to align supply with demand and enable sustainable pricing [8] Management's Comments on Operating Environment and Future Outlook - Management sees an undersupplied market through the end of next year, with expectations for pricing to start increasing [26][27] - Positive signs include strengthening transactional markets and encouraging customer engagements [20] - The company expects revenue for the fourth quarter to be between $1.750 billion and $1.850 billion, assuming bit shipments to be flat and ASP to be up mid to high single digits [19] Other Important Information - The company recorded a noncash impairment charge of $1.83 billion, reducing the goodwill balance to $5 billion [18] - The company is beginning to move away from providing explicit guidance on cost per bit due to industry cost reductions from technology migrations [22] Q&A Session Summary Question: Can you discuss supply and demand dynamics? - Management sees an undersupplied market through the end of next year, with expectations for pricing to start increasing [26][27] Question: How is the enterprise SSD market performing? - Demand has been consistent, with expectations for a tripling of enterprise SSD revenue from FY 2024 to FY 2025 [34] Question: What are the expectations for gross margins? - Headwinds include underutilization charges and fab startup costs, but higher ASPs are expected to help gross margins overall [38] Question: How is the company managing capacity and bit growth? - The company is carefully managing capacity to avoid oversupply while ramping up higher layer count and more density per wafer [41] Question: What is the outlook for NAND bit shipments? - The company expects NAND bit volume to grow low double digits this calendar year, with good visibility across various markets [56][58] Question: How does the yen exchange rate impact costs? - The front end is exposed to the yen, but not all costs are yen-denominated, which should be considered in modeling [81]