Meta internal memo exposed: Long-term supply agreements signed with SanDisk, Samsung, and Sumitomo Electric; computing power to double by 2027.

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A leaked internal memo from Meta has fully revealed the tech giant’s AI infrastructure expansion plans to the market, sparking significant volatility among related supply chain stocks on Thursday.

On Friday, according to Reuters citing the memo’s contents, Meta has signed long-term supply agreements respectively with SanDisk, Samsung Electronics, and Sumitomo Electric, covering flash storage, memory chips, and fiber-optic equipment to support its large-scale AI computing construction. The memo shows Meta plans to deploy 7 gigawatts of computing infrastructure in 2026, doubling that scale to 14 gigawatts by 2027, with annual capital expenditures projected to reach as high as $145 billion.

After the news became public, SanDisk’s share price surged more than 6.8% intraday, reaching $1844.96, Sumitomo Electric’s US ADR rose about 4.7%, and Samsung Electronics' Korean-listed shares climbed about 2.5%. Meanwhile, Meta’s own stock price fell about 2.2%, with the market expressing clear concerns about the cost pressures of its massive spending plan.

Memo Highlights: Computing Blueprint and In-House Chip Progress

The memo discloses detailed information about the infrastructure expansion plan. Meta plans to deploy 7 gigawatts of computing capacity in 2026, and increase the total to 14 gigawatts in 2027. At the same time, the timetable for Meta’s in-house AI chip “Iris” has been clarified—the chip is expected to enter mass production in September 2026, having already completed six weeks of bug testing with no major issues found.

“Iris” is the fourth-generation product of the Meta MTIA project, whose long-term goal is to reduce the company’s reliance on Nvidia and AMD hardware. The memo also shows Meta plans to maintain a pace of launching a new chip roughly every six months before 2027, indicating ongoing investment in in-house computing power.

For supply chain arrangements, the agreement with SanDisk focuses on flash storage, the agreement with Samsung covers memory chips, and the agreement with Sumitomo Electric targets fiber-optic equipment. All three are multi-year long-term agreements, but neither Meta nor SanDisk have officially confirmed the specific terms or sums, Meta did not respond to Reuters' request for comment, and SanDisk declined to comment.

SanDisk Leads Gains, Storage Sector Rebounds

SanDisk is the most direct beneficiary among listed companies revealed in the memo, as it is clearly named as Meta's flash supplier, driving its stock price sharply higher and reversing the persistent sluggishness of the NAND flash sector.

From SanDisk’s fundamentals, its latest quarterly revenue nearly doubled to $5.95 billion, with non-GAAP gross margins soaring to 78.4%, reflecting the severe supply shortage in the NAND flash market. The company’s recent financial report disclosed it has secured multi-year supply contracts with a minimum contract revenue of about $42 billion. SanDisk was spun off from Western Digital and listed in February 2025 at roughly $38.50 a share, with a cumulative gain exceeding 800% year-to-date, ranking as the best-performing S&P 500 stock in the first half of the year.

Thursday’s rally boosted the entire storage and memory sector. Micron Technology rose about 8%, Western Digital and Seagate each up about 7%, continuing the recovery from earlier sharp declines this week.

Huge Spending Sparks Market Divide, “Chip Inflation” Emerges as New Variable

Despite the broad gains among supplier stocks, the decline in Meta’s own share price reveals the market’s complex attitude towards its spending scale. Meta is expected to spend $145 billion on AI infrastructure in 2026, which occupies a significant portion of the over $700 billion predicted collective spending by major tech companies.

According to Morgan Stanley analysts, the rapid rise in memory and chip prices has made "chip inflation" a macro-level concern—a trend beneficial to suppliers like SanDisk, but at the same time increasing Meta’s cost pressure. The market’s balancing of this contradiction is being directly reflected in share price movements.

In addition, SK Hynix plans to price its US Nasdaq IPO on July 10, which will serve as a real-time test of institutional investors’ risk appetite in the AI memory sector and could further influence fund flows across the board.

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