Meta internal memo leaked: signed long-term supply agreements with SanDisk, Samsung, and Sumitomo Electric, doubling computing power by 2027

An leaked internal Meta memo puts the market on notice of the tech giant’s complete AI infrastructure expansion plans, triggering sharp 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, respectively, covering flash memory, DRAM chips, and fiber-optic equipment to support its large-scale AI compute capacity buildout. The memo shows that Meta plans to deploy 7 gigawatts of compute infrastructure in 2026, then double the scale to 14 gigawatts in 2027. Full-year capital expenditures are expected to reach as much as $145B.

After the news became public, SanDisk’s stock price rose by more than 6.8% at one point during trading to $1,844.96, while Sumitomo Electric’s U.S. depositary receipts rose about 4.7% and Samsung Electronics’ South Korea-listed shares were up about 2.5%. At the same time, Meta’s own stock fell by about 2.2%, with the market expressing clear concerns about the cost pressure from its massive spending plan.

Memo core: compute blueprint and progress on in-house chips

The infrastructure expansion details disclosed in the memo are extensive. Meta plans to complete a 7 gigawatt compute deployment in 2026 and increase the total to 14 gigawatts in 2027. Meanwhile, the memo also clarifies the development timeline for Meta’s in-house AI chip “Iris”—the chip is expected to enter mass production in September 2026. It has already completed six weeks of vulnerability 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 Nvidia and AMD hardware. The memo also shows that Meta plans to maintain a cadence of rolling out a new chip roughly every six months before 2027, indicating sustained investment in its in-house compute roadmap.

For the supply-chain layout, Meta’s agreement with SanDisk focuses specifically on flash storage, Samsung’s agreement covers memory chips, and the agreement with Sumitomo Electric centers on fiber-optic equipment. All three are multi-year long-term agreements, but Meta and SanDisk have not officially confirmed the specific terms or amounts. Meta did not respond to Reuters’ request for comment on the report, and SanDisk declined to comment.

SanDisk leads the rally, storage rebounds across the board

SanDisk was the most directly benefiting listed company in this memo leak, because the memo clearly identified it as Meta’s flash memory supplier. Its stock then rebounded sharply, reversing the prior prolonged weakness in the NAND flash sector.

From SanDisk’s own fundamentals, its latest fiscal-quarter revenue nearly doubled to $5.95 billion, and non-GAAP gross margin surged to 78.4%, reflecting the severe shortage conditions in the NAND flash market. In its most recent earnings report, the company disclosed that it has already secured multi-year supply agreements, with minimum contracted revenue of about $42 billion. SanDisk was spun off from Western Digital and listed in February 2025 at an offering price of about $38.50; its cumulative gain for the year-to-date has already exceeded 800%, placing it among the best-performing stocks in the S&P 500 for the first half.

The rebound on Thursday lifted the entire storage and memory sector. Micron rose about 8%, while Western Digital and Seagate each gained about 7%, continuing the repair rally after the sharp drop earlier in the week.

Large spending sparks market divergence; “chip inflation” becomes a new variable

Despite the broad rise in suppliers’ shares, the decline in Meta’s own stock reveals the market’s complex attitude toward the scale of its spending. Meta expects AI infrastructure spending of up to $145B in 2026, making up a significant share of the collective expected spending of more than $700 billion by big tech companies.

As Morgan Stanley analysts noted, the rapid rise in memory and chip prices has made “chip inflation” a macro-level issue of concern—a trend that benefits suppliers such as SanDisk, but at the same time increases cost pressure for buyers like Meta. The market’s weighing of this contradiction is reflected directly in stock-price movements.

In addition, SK Hynix plans to set the pricing for its U.S. Nasdaq IPO on July 10, which will be a real-time test of institutional investors’ risk appetite in the AI memory space, and may further affect capital flows across the entire sector.

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