Core Insights - The storage module industry is experiencing a significant shortage driven by AI demand, with NAND Flash prices increasing by approximately 50% this month, and DRAM prices for DDR4 and DDR5 also rising [2] - NAND Flash applications in AI have surged recently, leading to a shift in supplier capacity towards AI applications, with expectations of a substantial market opportunity due to HDD shortages [2] - The major DRAM manufacturers have no plans to increase DDR4 production, anticipating a gradual exit from the DDR4 market by 2026, which limits supply and drives prices up [2] Group 1: Company Performance - In Q3, the company reported revenues of 4.109 billion, a quarter-over-quarter increase of 27.2% and a year-over-year increase of 63.2%, with a net profit of 1.511 billion, reflecting a quarter-over-quarter increase of 259% and a year-over-year increase of 334% [3] - The company is primarily focused on industrial control, with DDR4 still dominating product shipments, while expecting an increase in DDR5 shipments as customers transition [2] Group 2: Market Trends - SanDisk predicts that the NAND Flash supply shortage will persist until at least the end of 2026, with indications that the tight supply situation may extend into 2027 [4] - The demand for NAND Flash is driven by long-term trends, capital investments, and industry transitions, with data centers expected to become the largest segment for NAND Flash by 2026 [4] - SanDisk's wafer fabs are operating at full capacity to replenish significantly reduced inventories, and the company is optimistic about the long-term growth of the data center market [4][6] Group 3: Future Outlook - SanDisk's revenue guidance for Q2 FY2026 is projected between 2.55 billion and 2.65 billion, exceeding market expectations, with adjusted earnings per share forecasted between 3.00 and 3.40 [6] - The company reported a 26% quarter-over-quarter growth in data center revenue, with ongoing collaborations with major data center clients [7] - BiCS8 technology is expected to dominate production by the end of FY2026, currently accounting for 15% of total shipments [7]