Chapter 2 · Financial Health

Cash machine on. Debt machine off.

Memory factories are expensive. Sandisk's outsources most of theirs.

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✦ The bottom line

Nine months ago, Sandisk's long-term debt was $1.83B. Today: zero. In the same window, they made $4.4B in free cash.

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✦ Teach me

Real cash left over

All the cash left after running the business and paying for the factories and equipment used to make next year's chips. Money the company can use to pay down debt, buy back shares, or just stockpile. Unlike its memory peers, Sandisk doesn't own most of its manufacturing — that's run through a joint venture in Japan with Kioxia. So its ~capex~ line is much smaller than Micron's or its other peers'.

FCF is how you separate *real* profit from *accounting* profit. Cash either showed up or it didn't.

$4.5B in cash is impressive on its own — but for memory companies, the next question is always how much went back out into capital spending. Memory factories cost tens of billions and take years to build. Most memory peers spend a huge slice of their cash flow on that. Sandisk's setup is different — almost all of the actual fab capacity sits inside a joint venture with Kioxia in Japan, so Sandisk's own capex line is unusually small.

Money made is one story. What the company did with it is another. Sandisk used most of this cash to pay off debt. The spin-off from Western Digital in February 2025 left the new company with about $1.8B of long-term debt. That entire stack has now been retired — within nine months of going independent.

Strong