SanDisk: Price increase, and full payment required!

SanDisk: Price increase, and full payment required!

The storage chip market is undergoing a supply-side upheaval triggered by the wave of AI, as the strong return of a seller’s market forces buyers to accept unprecedentedly harsh terms.

According to multiple sources including tech media outlet Digitimes, supply chain insiders have revealed that SanDisk has proposed a contract form described as “unheard of” in the industry to some downstream clients: requiring customers to pay the full amount in cash in advance to lock in supply quotas for the next 1 to 3 years.

Despite the strict terms, some cloud service providers (CSPs) are considering accepting the condition due to rigid demand for storage devices in AI infrastructure construction, in order to avoid future supply disruptions.

Meanwhile, drastic price volatility is imminent. According to a client report from Nomura Securities, SanDisk plans to raise prices of its high-capacity 3D NAND flash chips for enterprise SSDs by more than 100% month-on-month during March. Nomura Securities points out that this price increase is due to short-term supply shortages and mid-term growth in server-level storage demand in the AI sector.

This Friday, SanDisk's stock price surged another 13%, hitting an all-time high.

Cash Is King: Unprecedented Full Payment Pre-order System

Reports say that since 2025, NAND giant SanDisk has repeatedly pushed price hikes, and recently, their “order lock-in” demand has broken industry conventions. Supply chain sources say the “100% cash prepayment” clause from SanDisk is meant to guarantee supply for 1 to 3 years.

This unconventional contract form has shaken up the industry. Usually, supply chain cooperation involves installments or credit terms, so full prepayment poses a major challenge to buyers’ cash flow.

However, reports note that due to persistent AI demand and the long time needed for production expansion at original manufacturers, some cloud service providers urgently needing compute power have to consider accepting this term. In addition, SanDisk is expanding these contract negotiations to PC, smartphone, and module manufacturers.

Doubling Prices: Enterprise-Level Storage Leads the Way

Alongside the full payment demand, product prices are also soaring. Nomura Securities’ channel survey shows multiple storage suppliers have been driving prices up, with enterprise-level NAND seeing the most aggressive hikes. Nomura Securities states in its report: “Prices for SanDisk’s NAND used in enterprise-grade SSDs could surge over 100% month-on-month in March.”

Nomura Securities’ analysis notes that Nvidia’s Inference Context Memory Storage (ICMS) platform is a key factor driving enterprise storage demand this year. The platform is based on BlueField-4 DPU equipped with 512 GB SSDs. It’s estimated that if Nvidia ships 50,000 VR NVL144 racks per year, just these would consume roughly 0.439 EB of 3D NAND.

Although it’s currently unclear how much the doubling of enterprise product prices will impact the consumer market, Nomura Securities warns that since the 3D NAND used in smartphones and PCs is produced in the same wafer fabs as enterprise chips, consumer product prices typically follow enterprise price hikes.

Capacity Squeeze: AI-First Supply Crisis

The fundamental cause of the current situation is the strategic shift in capacity allocation by the world’s three major storage manufacturers (Samsung, SK Hynix, Micron). Analysts suggest original manufacturers have tilted most capacity toward higher-profit HBM (High Bandwidth Memory), mainly used in the AI market, drastically compressing the capacity previously used for standard DDR4/DDR5 and NAND production.

This structural shortage has triggered chaos and panic in the supply chain:

  • Tech giants scrambling for goods: Reports say Google’s TPUs rely heavily on HBM, and when seeking extra capacity from SK Hynix and Micron received “impossible” responses. Google even fired a storage procurement manager and is recruiting a specialized global storage commodity manager. Meta also plans to hire a dedicated “global storage procurement manager” to strengthen direct ties with upstream wafer fabs.
  • Panic buying and stockpiling: To get ahead of price hikes and shortages, PC brands like Lenovo have started aggressively stockpiling inventory, even pre-ordering their entire 2026 annual demand.
  • Market chaos: Rumors say Samsung HQ has quietly sent staff to Taiwan to investigate alleged bribery among employees and agents, indicating that irregular profiteering is occurring under extreme shortages.

Currently, buyers with greater financial strength have begun abandoning traditional long-term contracts, opting for short-term high-priced deals, with some even taking an “don’t ask the price, just buy if there’s stock” approach.

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