SanDisk's FY2027 Q1 revenue reaches $11.031 billion, AI inference drives NAND demand

SanDisk Quarterly Revenue Soars 378% Year-over-Year, AI Inference Ignites Global NAND Demand Source: Ban Dao Zong Heng Published: 2026-10-30 14:00 SanDisk Storage generates poster Long-term orders extend beyond 2030, SanDisk steps up AI storage layout.

Artificial intelligence infrastructure construction is bringing new growth space to the NAND flash memory market.

Recently, SanDisk announced its financial results for the first quarter of fiscal year 2027, with quarterly revenue reaching $11.031 billion, up 378% year-over-year, and a non-GAAP gross margin of 85.1%. At the same time, the company disclosed that long-term customer demand signals have extended beyond 2030, and part of its NAND capacity for fiscal years 2027 and 2028 has already been locked in ahead of time.

Growing AI data center demand is driving NAND applications to extend into more scenarios. From enterprise SSDs to KV Cache in the inference stage, and to the high-bandwidth flash HBF that SanDisk is developing, the application space for NAND in AI infrastructure is further expanding.

Data center business grows rapidly, becoming the main driver of performance

From the business structure perspective, data centers have become SanDisk's most important growth engine. In the first fiscal quarter, revenue from this business reached $4.802 billion, up 1,682% year-over-year and up 61% quarter-over-quarter, and its share of the company's total revenue rose from about 11.7% in the same period last year to about 43.5%, becoming the main contributor to this quarter's performance growth.

On the financial side, SanDisk's non-GAAP diluted earnings per share this quarter were $49.51, up 26% quarter-over-quarter; cash and cash equivalents at period-end were $5.136 billion, and the company currently has no debt.

In other businesses, edge computing revenue was $5.832 billion, up 7% quarter-over-quarter and up 320% year-over-year, with automotive and IoT customers performing relatively well, while the high-end and mainstream markets also maintained some resilience. The consumer business was relatively under pressure, with revenue of $397 million, down 29% quarter-over-quarter and down 39% year-over-year, mainly affected by product price increases and adjustments in end demand.

SanDisk also disclosed that about 60% of this quarter's revenue increment came from increased product shipments, while the other 40% came from price increases, indicating that this round of performance growth was driven by both higher shipments and rising NAND prices.

For the second quarter of fiscal year 2027, the company expects revenue of $12.2 billion to $12.6 billion, a non-GAAP gross margin of 84.5% to 85.5%, and non-GAAP diluted earnings per share of $55 to $57, all on a pre-split basis.

Long-term NAND orders extend beyond 2030

The progress in long-term customer cooperation disclosed by SanDisk in this earnings report is also worth noting.

The company is establishing multi-year cooperative relationships with customers through the New Business Model (NBM). By providing long-term demand signals and corresponding financial commitments, customers help SanDisk understand future procurement demand in advance and arrange production and supply resources accordingly.

SanDisk CEO David Goeckeler said that customer demand signals currently extend beyond fiscal year 2030, and long-term cooperation projects continue to increase. In terms of capacity coverage, about 50% of SanDisk's NAND supply for fiscal year 2027 has been included in NBM projects, and the coverage ratio for fiscal year 2028 is about two-thirds, and the company expects this ratio to continue to rise.

Management also revealed that about 95% of current NBM partners are investment-grade enterprises, and these enterprises together have about $130 billion in operating cash flow, providing some assurance for long-term cooperation. It is worth noting that some customers have already begun to add procurement demand. SanDisk said that some long-term cooperative customers have found that the NAND capacity required to actually run AI infrastructure is higher than previously estimated, so they have launched a second round of procurement, and the company is also bringing in new customers.

For SanDisk, the long-term cooperation model helps improve the visibility of future orders and plan capacity and supply arrangements in advance. However, the currently disclosed coverage ratios mainly apply to NBM projects and do not mean that all future NAND capacity has been locked in.

AI inference drives NAND demand growth

An important reason SanDisk is optimistic about the NAND market is that AI inference is increasing demand for storage capacity.

In the large-model inference process, KV Cache is used to store context information previously generated by the model, reducing repeated processing in subsequent computations. The longer the model context and the more complex the inference task, the greater the demand for cache space. In this process, DRAM and HBM handle high-performance data access, while NAND has the opportunity to take on larger-capacity data storage tasks. SanDisk believes that TLC NAND can be used for active data sets, checkpoints, and some cache scenarios with higher performance requirements, while QLC NAND is suitable for applications with large capacity requirements such as data lakes, vector databases, and retrieval databases.

From the perspective of market size, SanDisk estimates that a decade ago data centers accounted for about 20% of total NAND industry bit shipments, and now they are close to half. The company expects that by 2027 this ratio will exceed 55%, and data center NAND bit demand will grow about 40% year-over-year.

On the technology side, SanDisk is advancing upgrades across the BiCS product line. BiCS8 is currently the main high-volume production technology platform, using a CMOS directly bonded to array architecture. BiCS9 will further improve interface performance, while BiCS10 will advance node upgrades for TLC and QLC products, including 1Tb TLC dies and 2Tb QLC dies. The company says BiCS10 QLC will achieve twice the read and write bandwidth of BiCS8.

HBF completes first tape-out, laying out a new AI memory architecture

In addition to existing NAND products, SanDisk also announced the latest progress on High Bandwidth Flash (HBF).

In the first quarter of fiscal 2027, SanDisk's first HBF memory die has completed tape-out and is now in the manufacturing stage, with plans to deliver the first samples to customers in 2027.

In addition, SanDisk is exploring the use of SLC NAND in AI inference. Because SLC has higher write endurance, some agent-type workloads may generate demand for such products. The company is discussing related applications with customers and is also studying whether SLC NAND can take on some DRAM storage tasks in specific scenarios. However, this direction is still in the demand research stage and has not yet resulted in actual sales.

PC market under pressure, automotive storage still has room for growth

Beyond data centers, SanDisk also provided an outlook for markets including PCs, smartphones, and automotive.

The company expects PC device shipments may see a low-single-digit decline in 2027, but increased storage capacity per device is still expected to drive growth in total PC market bit demand. Smartphones and data centers are also expected to maintain positive bit demand growth.

Automotive and IoT businesses are important growth areas for edge computing. SanDisk said customer demand in these areas is performing well, the company is deepening cooperation with major automotive customers, and automotive is expected to become one of the larger segments of the edge computing business.

$5 billion buyback, announces 8-for-1 stock split

Strong results have also brought SanDisk ample cash flow. In the first quarter of fiscal 2027, the company's operating cash flow reached $6.363 billion, and adjusted free cash flow was $5.696 billion.

In terms of shareholder returns, the company repurchased about 3.2 million shares of common stock during the quarter for $5 billion. Over the past two fiscal quarters, it has repurchased about 6 million shares in total, and the company said it will continue to maintain a balance between business investment and shareholder returns.

In addition, SanDisk's board of directors approved an 8-for-1 stock split of common stock. Shareholders of record as of the close of business on November 9, 2026, will receive seven additional shares for each share held, with the additional shares expected to be distributed after the close on November 19, and the post-split stock is scheduled to begin trading on November 20.

Looking at this earnings report, AI data centers have become an important driver of SanDisk's performance growth. The long-term cooperation model improves visibility into future orders, BiCS technology upgrades continue to drive improvements in NAND product performance and capacity, and new memory architectures such as HBF also provide new directions for application exploration in AI inference.

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