Core Viewpoint - NAND demand continues to exceed supply, benefiting Kioxia and SanDisk as they capitalize on the NAND supply-demand dividend [1][22]. Financial Performance - SanDisk's Q1 FY2026 revenue reached $2.308 billion, a 21% increase quarter-over-quarter and a 23% increase year-over-year [4][25]. - Non-GAAP diluted earnings per share (EPS) surged to $1.22, up 321% from the previous quarter [5][26]. - Adjusted free cash flow soared to $448 million, reflecting a 482% quarter-over-quarter increase and a 399% year-over-year increase [6][27]. - The company achieved a net cash position of $910 million, six months ahead of its target [8][27]. Market Growth - All three major end markets (data center, edge computing, and consumer) experienced significant growth, with data center revenue increasing by 26% to $269 million [10][25]. - Edge computing revenue also surged by 26%, reaching $1.387 billion, driven by Windows system upgrades and increased device capacity [11][25]. - The consumer market grew by 11%, with notable sales from collaborations with Nintendo and ROG Ally [11][25]. Technology and Supply Chain - The BiCS8 technology is expected to become a mainstream production technology by the end of FY2026, enhancing the company's competitive edge [14][19]. - A joint venture with Kioxia secures wafer supply, providing both cost and capacity advantages [15][19]. Future Guidance - For Q2 FY2026, SanDisk expects revenue between $2.55 billion and $2.65 billion, indicating continued growth momentum [16][28]. - Non-GAAP EPS guidance for Q2 is projected to be between $3.00 and $3.40, reflecting a significant increase [17][28]. - Non-GAAP gross margin is expected to rise to 41%-43%, driven by improved product mix and cost control [18][28].

Core Insights - The storage market is experiencing a rare supply-demand imbalance, driven by increased capital expenditure from cloud giants and rising AI demand, leading to memory shortages and significant price increases for both DRAM and NAND flash [2][3] - High Bandwidth Flash (HBF) is emerging as a new technology concept that could elevate NAND flash to a core asset in the AI era, similar to how High Bandwidth Memory (HBM) has transformed DRAM [2][3][4] Group 1: HBF Technology Development - HBF is a NAND version of high bandwidth memory technology, connecting 16-layer NAND stacks to logic chips and then to GPUs via multi-channel high bandwidth connections [3][4] - The architecture of HBF aims to balance performance and cost, matching HBM's bandwidth while providing 8 to 16 times the storage capacity at a similar cost [4][5] - The HBF ecosystem is beginning to take shape, with various industry players showing interest and starting to develop this technology [4][5] Group 2: Industry Players and Strategies - SK Hynix has launched the "AIN Family" product lineup, which includes HBF technology, aiming to meet the rapidly growing demand for NAND storage products in the AI inference market [5][6] - SanDisk is aggressively pushing HBF technology, planning to provide samples by mid-2026 and formal products by early 2027, showcasing strong confidence in its technological prospects [10][12] - Kioxia is taking a pragmatic approach by exploring multiple technical paths for HBF, which allows it to leverage partnerships while developing differentiated solutions [13][15] Group 3: Competitive Landscape - Samsung is cautiously entering the HBF space, focusing on early concept designs without a clear timeline for product release, reflecting a more conservative strategy compared to its competitors [16][17] - The competition among SK Hynix, SanDisk, Kioxia, and Samsung will shape the emerging HBF market, with each company adopting different strategies to establish their positions [19] - The transition of NAND from a low-cost storage solution to a high-value core component is underway, driven by AI demands and the evolution of memory architecture [19]

Core Insights - The storage market is experiencing a rare supply-demand imbalance, driven by increased capital expenditure from cloud giants and rising AI demand, leading to a memory shortage and significant price increases for both DRAM and NAND flash [1] - NAND flash is gaining prominence, with prices for 512Gb TLC wafers reaching $5 and 1Tb TLC/QLC wafers hitting $6.5 to $7.2, marking a shift from being a low-cost storage option to a high-value component [1] - High-Bandwidth Flash (HBF) is emerging as a new technology concept that could elevate NAND's status in the AI era, similar to how High-Bandwidth Memory (HBM) has transformed DRAM [1][2] Group 1: HBF Technology Overview - HBF is a NAND version of high-bandwidth memory technology, connecting 16-layer NAND stacks to logic chips and then to GPUs or other processors via multi-channel high bandwidth [2] - HBF aims to balance performance and cost, providing 8 to 16 times the storage capacity at a similar cost to HBM, making it competitive for large model storage scenarios [3] Group 2: Industry Players and Strategies - SK Hynix has launched the "AIN Family" product lineup, which includes HBF technology, focusing on high-capacity, low-cost NAND combined with HBM structures to meet the growing demand for AI data processing [4][5] - SanDisk is aggressively pushing HBF, planning to provide samples by mid-2026 and formal products by early 2027, leveraging a partnership with SK Hynix for standardization [9][10] - Kioxia is exploring multiple technical paths for HBF, including a prototype for edge servers that utilizes a unique daisy-chain connection to overcome bandwidth bottlenecks [12][14] - Samsung is taking a cautious approach, currently in the early concept design phase for its own HBF products, leveraging its extensive experience in NAND and DRAM technologies [16][17] Group 3: Market Dynamics and Future Outlook - The NAND market is undergoing a transformation, shifting from a low-cost storage solution to a core component driven by AI demand, with the potential for HBF to replicate the success of HBM [19] - The competition among SK Hynix, SanDisk, Kioxia, and Samsung will shape the emerging HBF market, with the critical period for developments expected around 2026-2027 [19]

Core Viewpoint - The storage market is experiencing a rare supply-demand imbalance, driven by increased capital expenditure from cloud giants and heightened demand for artificial intelligence, leading to a significant memory shortage and price surges in both DRAM and NAND flash memory [1][2]. Group 1: NAND Flash Market Dynamics - Since September, the price of 512Gb TLC wafers has steadily increased, reaching $5 by late October, while 1Tb TLC/QLC wafers have hit a price range of $6.5 to $7.2 [1]. - NAND flash, traditionally seen as a low-cost storage option, is now gaining prominence due to its critical role in the current price surge [1]. - The core reason for NAND price increases includes depleted inventories and the emergence of High-Bandwidth Flash (HBF) technology, which may elevate NAND to a similar status as HBM in the AI era [1][3]. Group 2: High-Bandwidth Flash (HBF) Technology - HBF is a NAND version of high-bandwidth memory technology, connecting 16-layer NAND stacks to logic chips and then to GPUs or other processors via multi-channel high bandwidth [3]. - HBF aims to balance performance and cost, matching HBM memory bandwidth while providing 8 to 16 times the storage capacity at a similar cost, making it competitive in large model storage scenarios [3][4]. - The technology is being developed by various companies, with a growing ecosystem around HBF emerging [4]. Group 3: Competitive Landscape - SK Hynix has introduced the "AIN Family" product lineup, which includes HBF technology, focusing on high capacity, low-cost NAND combined with HBM structures to meet the growing demand for AI data processing [6][7]. - Flash memory company SanDisk plans to provide HBF samples by mid-2024 and aims for a formal product launch in early 2027, indicating strong confidence in the technology's future [9]. - Kioxia is exploring multiple technical paths for HBF, including a high-speed flash drive prototype aimed at edge servers, showcasing a practical and diversified approach to technology development [13][14]. Group 4: Samsung's Strategy - Samsung is cautiously developing its own HBF products, leveraging its extensive experience in NAND and DRAM technologies, although specific product details and timelines remain undisclosed [17][18]. - The company aims to avoid past mistakes in the HBM market by observing competitors and refining its approach before launching products [19]. Group 5: Future Outlook - The NAND market is undergoing a transformation from a low-cost storage solution to a high-value core component, driven by AI demand and the rise of HBF technology [21]. - The competition among SK Hynix, SanDisk, Kioxia, and Samsung will shape the emerging HBF market, with the potential for NAND to replicate the success of HBM in the AI infrastructure landscape [21].

Core Viewpoint - Sandisk and SK Hynix are collaborating to standardize High Bandwidth Flash (HBF) technology, which aims to enhance GPU access to large NAND capacities, thereby accelerating AI training and inference workloads [1][3][6]. Group 1: Collaboration and Standardization - The memorandum of understanding (MoU) between Sandisk and SK Hynix focuses on defining technical requirements and creating an HBF technology ecosystem [3][4]. - Sandisk's CTO emphasized that this collaboration addresses the urgent need for scalable memory in the AI industry, aiming to provide innovative solutions to meet exponential data demands [3][4]. - SK Hynix's expertise in HBM technology positions it well to contribute to the development of HBF, which is seen as crucial for unlocking the full potential of AI and next-generation data workloads [3][6]. Group 2: Technical Specifications and Advantages - HBF aims to provide bandwidth comparable to HBM while offering 8-16 times the capacity at similar costs, potentially reaching up to 768 GB [4][6]. - HBF technology combines NAND flash with HBM-like bandwidth capabilities, allowing for significant capacity increases while sacrificing some latency [6][8]. - Unlike DRAM, NAND flash is non-volatile, enabling lower energy consumption for persistent storage, which is critical as AI inference expands into energy-constrained environments [6][8]. Group 3: Market Implications and Future Developments - The collaboration signifies the importance of a multi-supplier HBF market, ensuring customers are not reliant on a single vendor and fostering competition to accelerate HBF development [4][10]. - Sandisk's HBF technology received recognition at the FMS 2025 event, and the first samples are expected to be launched in the second half of 2026, with AI inference devices anticipated in early 2027 [5][9]. - The integration of HBF technology could pave the way for heterogeneous memory stacks, allowing DRAM, flash, and new persistent memory types to coexist in AI accelerators, addressing rising HBM costs [10].