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Sandisk Locks In $42B in AI Chip Deals
1 May
Summary
- Long-term contracts worth at least $42 billion signed.
- Revenue more than tripled to $5.95 billion in Q3.
- Company predicts strong performance for the current quarter.
SanDisk has reported a substantial increase in revenue and profit, positioning itself to navigate the volatile memory chip market. The company announced the signing of long-term supply agreements valued at a minimum of $42 billion, designed to mitigate extreme price fluctuations. These agreements, ranging from one to five years, aim to provide consistent and predictable financial outcomes.
Fueled by the burgeoning artificial intelligence sector, SanDisk's primary product, NAND storage memory, is experiencing heightened demand as AI systems process large volumes of data. In the third quarter, revenue more than tripled, reaching $5.95 billion, significantly surpassing market expectations. Adjusted profits also saw a dramatic improvement, turning around from a loss in the previous year to $23.41 per share.
Looking ahead, SanDisk anticipates continued success in the current quarter, forecasting sales between $7.75 billion and $8.25 billion, with adjusted profits projected at $30 to $33 per share. To further bolster shareholder value, the company has initiated a $6 billion share buyback program. These strategic moves aim to ensure financial stability and consistent growth in the dynamic semiconductor industry.
