Meta Internal Memo Leaked: Long-term Supply Agreements Signed with Sandisk, Samsung Electronics, and Sumitomo Electric; Computing Power to Double by 2027

A leaked internal memo from Meta has laid out the tech giant's AI infrastructure expansion plan in full view of the market, triggering significant volatility in supply chain-related stocks on Thursday.

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

Following the disclosure, Sandisk's stock rose more than 6.8% during intraday trading to $1,844.96, Sumitomo Electric's American Depositary Receipts (ADRs) gained approximately 4.7%, and Samsung Electronics' shares listed in Korea rose about 2.5%. Meanwhile, Meta's own stock declined by approximately 2.2%, reflecting clear market concern over the cost pressures associated with its massive spending plan.

Core of the Memo: Computing Power Blueprint and Progress on Self-Developed Chips

The memo disclosed detailed plans for infrastructure expansion. Meta plans to complete the deployment of 7 gigawatts of computing power in 2026 and increase the total to 14 gigawatts in 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 and has currently completed six weeks of vulnerability testing without any major issues identified.

"Iris" is the fourth-generation product of Meta's MTIA project, which aims to reduce the company's reliance on hardware from Nvidia and AMD in the long term. The memo also revealed that Meta plans to maintain a pace of launching a new chip approximately every six months until 2027, demonstrating its continued investment in its self-developed computing roadmap.

In terms of supply chain layout, the agreement signed with Sandisk specifically targets flash memory storage, the agreement with Samsung covers memory chips, and the agreement with Sumitomo Electric focuses on fiber optic equipment. All three are multi-year long-term agreements, but neither Meta nor Sandisk has officially confirmed the specific terms or amounts of the agreements. Meta did not respond to Reuters' request for comment, and Sandisk declined to comment.

Sandisk Leads Gains, Memory Sector Rebounds Broadly

Sandisk was the most directly benefited listed company from the leak of the memo, as it was explicitly named as Meta's flash memory supplier, causing its stock to rebound sharply and reverse the previous sustained downturn in the NAND flash memory sector.

From Sandisk's fundamental perspective, its revenue in the latest fiscal quarter 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 most recent earnings report, the company disclosed that it had secured multi-year supply agreements with minimum contract revenue reaching approximately $42 billion. Sandisk was spun off from Western Digital and listed in February 2025 at an issue price of about $38.50, with its year-to-date cumulative gain exceeding 800%, ranking among the best-performing stocks in the S&P 500 index in the first half of the year.

Thursday's rebound drove strength across the entire storage and memory sector. Micron Technology rose about 8%, while Western Digital and Seagate each gained approximately 7%, continuing the recovery trend after significant declines earlier in the week.

Massive Spending Causes Market Divergence, "Chip Inflation" Becomes a New Variable

Although supplier stocks generally rose, the decline in Meta's own stock revealed the market's complex attitude toward the scale of its spending. Meta expects AI infrastructure spending to reach as high as $145 billion in 2026, accounting for a significant portion of the estimated collective spending of over $700 billion by large technology companies.

According to Morgan Stanley analysts, the rapid rise in memory and chip prices has made "chip inflation" a macro-level concern—a trend that benefits suppliers like Sandisk but simultaneously increases cost pressures for buyers like Meta, with the market's weighing of this contradiction directly reflected in stock price movements.

Additionally, SK Hynix plans to price its U.S. Nasdaq IPO on July 10, which will serve as a real-time test of institutional investors' risk appetite in the AI memory sector and may further influence capital flows across the entire sector.