Sandisk Shares Rise 1.9% After SK Hynix Posts Record Results, as Memory Shortages Expected Through 2030
Key Facts
Sandisk shares rose 1.9% in premarket trading on October 28 after SK Hynix reported record third-quarter results, according to Reuters. The move puts the stock among a rally in storage and memory shares, with Western Digital up 5.1% in the same session. But SK Hynix's results offer an indication of memory-sector trends and do not by themselves establish Sandisk's performance or directly explain its share-price movement. The South Korean company reported revenue of 104.6155 trillion won, operating profit of 83.3338 trillion won and net profit of 39.7756 trillion won. Its operating margin was 80%, according to the company's announcement published on October 28.
SK Hynix's revenue rose 32% from the previous quarter, while operating profit increased 38%. The company reported revenue of 79.3187 trillion won and operating profit of 60.5426 trillion won in the second quarter. The stronger increase in operating profit compared with revenue growth reflects higher prices for key memory products, the company said. SK Hynix said, "Prices of key products rose, driven by growth in demand for AI memory." The company linked this to its record quarterly results, while its results remain a sector indicator rather than direct evidence of Sandisk's upcoming results.
SK Hynix also attributed its performance to growth in DDR5 server sales and the start of meaningful HBM4 shipments, alongside expanding sales of 321-layer TLC eSSD NAND storage drives. These factors span high-performance server memory and storage drives used in data centers, sectors benefiting from the expansion of AI infrastructure. Sandisk produces NAND storage solutions, while the HBM4 signal relates to SK Hynix's products; the two companies therefore operate in different submarkets and products. The South Korean company said demand would remain above supply in the memory market through 2030. It attributed this outlook to the difficulty of advanced manufacturing processes and the long time needed to build new production facilities.
Sandisk says data centers' share of flash drive consumption has expanded in recent years, rising from about 20% in the early part of the decade to 30% in the previous year, and then to 50% currently. This shift puts storage among the infrastructure requirements for AI, alongside memory used in servers. The company also expects the flash market to exceed $300 billion in 2026 and approach $500 billion in 2027. Sandisk estimated that capital spending by a selected group of hyperscale and neocloud companies would reach $842 billion in 2026 and about $1.1 trillion in 2027, totaling nearly $1.9 trillion over the two years. It forecast flash drive shipments of 1.2 zettabytes in 2026.
On the memory product front, SK Hynix expects HBM4 to become its main product starting in the fourth quarter of 2026, surpassing HBM3E in shipment volume and revenue during that quarter. The outlook follows the start of HBM4 shipments in the third quarter, according to the company's disclosure. Sandisk's next milestone for investors is the release of results for the first quarter of its fiscal 2027. The company said its earnings call will be held on Thursday, October 29, 2026, at 1:30 p.m. Pacific Time. The market is watching for what Sandisk will say about demand and pricing in its NAND storage and data center businesses.