Rupal Singh

Rupal Singh asked for clarification on the non-recurring benefit from managing new product introductions (NPI) that contributed to lower OpEx in the quarter. She also inquired about SanDisk's capital allocation plans, including spending on High Bandwidth Flash (HBF) and data center expansion, as well as any capital return or M&A plans.

Answer

CFO Luis Visoso explained that the OpEx benefit stemmed from a recurring change to charge for qualification units, moving costs from period expenses to inventory, resulting in a one-time gain during the transition and ongoing savings. He reiterated that SanDisk's capital allocation strategy remains unchanged: investing in the business, building prudent cash reserves, and continuing to reduce debt (from $2 billion to $650 million), while fully funding current business needs. He confirmed there were no underutilization charges in the current quarter or the guidance.