SanDisk CFO Luis Russo said the company sees its total addressable market expanding tenfold to $500 billion by calendar year 2027, driven primarily by artificial intelligence and data center demand.
Speaking Tuesday at Citi’s Global TMT Conference in New York, Russo reported that data center revenue reached $3 billion in the previous quarter, accounting for 38% of total business. The company generated $5 billion in free cash flow over the same period and returned $4.5 billion to shareholders through buybacks.
Russo described a major transition in how SanDisk sells memory products, moving away from quarterly spot transactions toward New Business Models (NBMs) featuring volume commitments, pricing bands, and fixed-term agreements. The first NBM was signed with a strategic U.S. hyperscaler in January, and the company now has contracts with three such customers plus at least one edge market client. About half of overall business remains priced at spot rates.
"We have been very selective," Russo said. "We wanted to focus on those few customers that we thought are going to win in the market, that are very, very strategic for us."
The company aims to have NBMs cover 50% of bits sold by the end of fiscal 2028. Russo noted that gross margins under these contracts remain around 80% even at floor levels, while operating expenses have been trimmed to roughly 5% of revenue.
On the technology front, SanDisk completed its BiCS8 flash transition, which delivers improved performance, density, and energy efficiency. Carrera compute and Stargate QLC storage products are already in market. An HBF (Hybrid Bonding Flash) product—being developed jointly with SK Hynix, Google, and Meta—is expected to reach customers in 2027, aimed at placing memory closer to CPUs and GPUs for inference workloads.
Russo also addressed capacity balance, stating, "Everything is going to be balanced at the end of the day. There cannot be more demand than supply." He added that wafer utilization has normalized after a period of underuse roughly 18 months earlier.
Looking ahead, Russo projected mid-to-high teens revenue growth from fiscal 2028 through 2030, tracking parallel bit growth. The India DRAM operations received an initial $1 billion investment that was valued at approximately $2 billion after quarter-end.
For edge and consumer markets, Russo cited "very good" results from smartphone and PC customers. Low-end device models are losing viability as memory subsidies disappear, pushing buyers toward higher-performing options. Edge unit growth is expected to be low single digits next year.
"We believe in a portfolio," Russo said. "We want to maintain a presence across data center, edge and consumer markets to maximize value over time."
