SanDisk shifts to 5-year contracts due to artificial intelligence
SanDisk has transitioned to five-year contracts for SSD supply in response to the rapid development of artificial intelligence infrastructure. According to CFO Luis Visos, these agreements will include fixed and variable pricing, as well as quarterly delivery volumes, allowing the company to better forecast demand and align production with future revenue. Other manufacturers, such as Seagate and Western Digital, are also entering into long-term contracts, with delivery commitments extending to 2028-2029. This shift is expected to reduce the risk of overproduction and meet the growing demand in the AI market.
Amid the rapid development of artificial intelligence infrastructure, SSD and HDD manufacturers are shifting toward long-term contracts of up to 5 years. Specifically, SanDisk has begun entering into 5-year agreements for SSD supplies. This was reported by Ixbt.com xabar.
SanDisk CFO Luis Visoso noted that these agreements include fixed and variable pricing. They also specify quarterly delivery volumes.
This allows the company to forecast demand more accurately and align production with future revenue.
The planning horizon for hard disk drive manufacturers has also expanded significantly. Seagate CEO William Mosley announced that the company has signed major contracts with large clients for exabyte-scale deliveries.
Capacity for nearline drives is almost fully allocated through the end of 2027.
A similar situation is being observed at Western Digital. According to company CEO Irving Tan, contract terms are extending into 2028-2029.
As a result, storage devices are shifting from being commodities with volatile pricing to products with stable, multi-year demand. This approach reduces the risk of overproduction and helps companies keep pace with the growing demand in the artificial intelligence market.
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