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

Author | Zhao Ying

      Editor | Hard AI

A leaked Meta internal memo presented the tech giant’s AI infrastructure expansion plan in full view of the market and triggered significant volatility among supply-chain-related stocks on Thursday.

On Friday, according to Reuters citing the memo, Meta has signed long-term supply agreements with SanDisk, Samsung Electronics, and Sumitomo Electric, respectively, covering flash memory, memory chips, and fiber optic equipment to support its large-scale AI computing power buildout. The memo shows that Meta plans to deploy 7 GW of computing infrastructure in 2026 and double this to 14 GW in 2027, with annual capital expenditures expected to reach $145 billion.

After the news was released, SanDisk’s share price surged more than 6.8% intraday to $1,844.96, Sumitomo Electric’s American Depository Receipts rose about 4.7%, and Samsung Electronics’ Korean-listed stock rose about 2.5%. Meanwhile, Meta's own stock fell about 2.2%, as the market expressed clear concern over its massive spending plan’s cost pressures.

Core of the memo: Blueprint for computing power and progress of self-developed chips

The memo detailed the infrastructure expansion plan.Meta plans to complete the deployment of 7 GW of computing power in 2026 and raise the total to 14 GW by 2027. At the same time, the timeline for Meta’s self-developed AI chip "Iris" was clarified—the chip is expected to enter mass production in September 2026, having completed six weeks of bug testing with no major issues found.

"Iris" is the fourth-generation product of Meta’s MTIA project, whose long-term goal is to reduce the company’s reliance on hardware from Nvidia and AMD.The memo also shows that Meta plans to maintain a tempo of launching a new chip roughly every six months before 2027, indicating its continued investment in its self-developed computing power path.

On the supply chain front, Meta’s agreement with SanDisk is specifically for flash memory storage; with Samsung, the agreement covers memory chips; with Sumitomo Electric, it focuses on fiber optic devices. All three are multi-year long-term agreements, but neither Meta nor SanDisk provided official confirmation of contract details or amounts; Meta did not respond to a request for comment from Reuters, while SanDisk declined to comment.

SanDisk leads the gains, storage sector rebounds across the board

SanDisk is the most directly benefited public company in this memo disclosure, as the memo specifically names it as Meta’s flash memory supplier. The stock price immediately rebounded sharply, reversing the previous continuous downturn in the NAND flash memory sector.

From a business perspective, SanDisk's latest quarterly revenue nearly doubled to $5.95 billion, and its non-GAAP gross margin soared to 78.4%, reflecting the severe supply shortage in the NAND flash memory market. In its recent earnings report, the company disclosed it has secured multi-year supply agreements with minimum contract revenue of about $42 billion. SanDisk was spun off from Western Digital and went public in February 2025 at an initial price of about $38.50, with a cumulative gain of over 800% this year, ranking among the best-performing stocks in the S&P 500 for the first half of the year.

Thursday’s rebound drove the entire storage and memory sector higher. Micron Technology rose about 8%, Western Digital and Seagate both rose about 7%, continuing the recovery after a steep decline earlier this week.

Massive spending triggers market division; “chip inflation” becomes a new variable

Although supplier stock prices generally rose, the decline in Meta’s own stock exposes the market’s complicated attitude toward the scale of its spending. Meta expects to spend up to $145 billion on AI infrastructure in 2026, which accounts for a significant share of the collective $700 billion-plus forecast for major technology companies.

According to analysts from Morgan Stanley, the rapid rise in memory and chip prices has made “chip inflation” a macro-level focus issue—a trend that benefits suppliers like SanDisk, but at the same time increases cost pressures for buyers like Meta. The market’s weighing of this contradiction is reflected directly in the stock trajectories.

Additionally, SK Hynix is scheduled to price its U.S. Nasdaq IPO on July 10. This will become a live test of institutional investors’ risk appetite for the AI memory field and may further influence the sector’s capital flows.