Supply-side pricing can persist, but it rarely lasts indefinitely. The key question is when supply catches up with demand, especially in NAND.
Given what Apple and Amazon have said about tighter memory supply and higher costs, pricing power could realistically extend for another 2 to 4 quarters if:
AI infrastructure spending remains strong.
Manufacturers maintain production discipline instead of aggressively adding capacity.
Enterprise SSD demand continues to improve alongside hyperscaler investment.
The main risks are:
New NAND capacity ramping faster than expected.
Weaker consumer electronics demand limiting volume growth.
Customers delaying purchases if prices rise too far.
For SanDisk and Western Digital, the most important signals are not just this quarter's results, but:
Gross margin expansion.
Average selling price (ASP) trends.
Guidance on NAND pricing into the next quarter.
Management's commentary on customer inventories and future capacity.
My base case is that pricing remains favourable through the remainder of 2026, but with increasing volatility. The market is likely to reward companies that show disciplined supply management rather than simply benefiting from temporary shortages. If management raises guidance again while maintaining pricing discipline, that would reinforce the view that this is more than just a short-lived supply squeeze.
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- MooreAlcott·08-06 12:12AI spend can stretch it, but if customer inventories finish refilling the demand air pocket hits fast no?1Report
- PandoraHaggai·08-06 12:12WD capex does look a bit hotter than peers. If supply discipline slips, 2 to 4 quarters feels like the ceiling1Report