Meta Platforms has entered a long-term supply agreement with Sandisk to procure NAND flash storage chips for its growing artificial intelligence data centers, according to an internal company memo seen by Reuters.
The tech giant plans to begin manufacturing its own AI chip in September and aims to scale its computing capacity to 14 gigawatts by next year.
Sandisk will serve as a key external supplier for the hardware build-out.
Data center expansion requires substantial memory hardware.
Deploying one gigabyte of AI compute capacity demands roughly 25 exabytes of flash capacity, based on data from tech publication The Next Platform.
Industry estimates from SK Hynix suggest the ongoing global memory shortage could last up to five years, with demand exceeding supply by 20%.
Sandisk's Revenue Pipeline Grows
The Meta deal follows several multi-year supply contracts signed by Sandisk.
During its April earnings call, Sandisk executives revealed that three contracts executed in the third quarter of fiscal 2026 are expected to generate at least $42 billion in revenue.
Sandisk management stated it expects to "conclude additional agreements over the next few months."
The company has included variable pricing riders in its recent long-term commitments, allowing it to adjust revenue if market prices rise during prolonged chip shortages.
Sandisk reported earnings of $66.51 per share for fiscal year 2026, supported by an existing $42 billion revenue pipeline that surpasses its trailing twelve-month baseline of $13.2 billion.
