2014 investor day-presentation-appendix_finalpdf

1 Investor Day 2014 | May 7, 2014

Welcome

Agenda

8:10a Sanjay Mehrotra

President and Chief Executive Officer

8:45a Henri Richard

SVP, WW Commercial Sales & Support

9:05a John Scaramuzzo

SVP & GM, Enterprise Storage Solutions

9:40a Coffee Break

10:00a Dr. Siva Sivaram

SVP, Memory Technology

10:30a Judy Bruner

EVP, Administration and Chief Financial Officer

11:15a Q&A

12:15p Lunch with SanDisk Executives

2:00p Completion of Investor Day

Forward Looking Statement

During our meeting today we will be making forward-looking statements. Any statement that refers to expectations, projections or other characterizations of future events or circumstances is a forward-looking statement, including those relating to market positions, market growth, industry trends, revenue, pricing, product sales, expenses, gross margin or other financial measures, capital investments, cash flow, uses of cash, customer relationships and partnerships, strategic investments and other strategic transactions, competition and competitive advantages, future memory and other technologies, production capacity, technology transitions and future products.

Actual results may differ materially from those expressed in these forward-looking statements including due to the factors detailed under the caption “Risk Factors” and elsewhere in the documents we file from time-to-time with the SEC, including our annual and quarterly reports.

Reconciliations between non-GAAP and GAAP results and forecasts presented are included in the appendix of this presentation.

We undertake no obligation to update these forward-looking statements, which speak only as of May 7, 2014.

Sanjay Mehrotra

Expanding the Possibilities of Storage

President & Chief Executive Officer

May 7, 2014

Agenda

Opportunities and Strategy

Strengthening SanDisk Portfolio

SanDisk View of Industry Supply Trends

Supporting Our Growth Plans

Secular Demand Trends Drive Need for NAND Flash

Immense Opportunity for Flash in the Growing Data Universe

CLOUD Internet

of Things (IoT)

Mobility Wearable Computing

Data Center Evolution

Big Data In-Memory Computing

NAND Flash Transforming the Data Center

Performance Benefits at a Lower TCO

Virtualization Flexibility for provisioning of shared storage

Infrastructure Reduction in power, cooling and floor space

Service Delivery Instant access, real-time results

2013 2017

Enterprise SSD TAM Revenue ($B)

Exciting Growth Ahead in Enterprise Storage Market

Source: SanDisk Market

Intelligence Source: SanDisk estimate

2013 2017

Enterprise SSD Client SSD Embedded Removable Others

Addressable Market Growing to $41B in 2017

+ $12B

Source: SanDisk estimate

TAM Revenue ($B)

Winning Strategy; Solid Execution

1 Strengthen Position in High Value Segments

2 Drive Predictable, World- Class Product Execution

3 Drive Commercial Business Leadership

4 Deliver Strong Financial Returns

Growing share in SSDs, premium retail

#1 supplier to many leading OEMs

Robust business model and capital returns

Increasing momentum with ecosystem partners, channel and hyperscale customers

Portfolio Mix Shifting to Higher Value Solutions

Removable includes all branded and unbranded removable products including cards and USB

Other includes wafers, components and accessories

L&R = License & Royalty

2009A 2013A 2017E

SSD Embedded Removable, Other, L&R

Strengthening SanDisk Portfolio:

Retail, Embedded, SSDs

Retail

Embedded

#1 Consumer Flash Brand in the World

33% 300,000+ Storefronts Worldwide

Sources: SanDisk, SanDisk revenue share estimate based on “The NPD Group/Retail Tracking Service”; “FutureSource Consulting Memory Report”,

December 2013; “CMR Consumer Storage Flash Devices Report”, 4Q13; GFK Retail and Technology, December 2013

* All non-embargoed countries; ** Premium represents Ultra, Extreme branded mobile and imaging cards sold in retail

36% 25% 34%

2012 2013

SanDisk products are sold in ALL Countries*

SanDisk Global Revenue Market Share

Unit mix shifting to premium offerings**

2012 2013

Retail: New Exciting Market Opportunities

Hi-def video driving greater demand

2013–2020: 1 Billion people joining the middle class

SanDisk Connect™ Expand, Stream, and Share

Storage for Video Growing Global Consumer Base

New Product Categories

Source: World Bank 2010

Wireless Media Drive

Wireless Flash Drive

Retail

Embedded

Significant Embedded Growth in 2013

2012 2013

Embedded Revenue

2012 2013

Sales to China OEMs

Diversified Embedded Market Opportunities

Smartphones

Connected Home

Tablets

Wearables Automotive

Smartphones

Tablets

Connected Home Wearables Automotive

Retail

Embedded

Trusted Partner Across PC Ecosystem

Qualified

Supplier to

Top 10

PC OEMs

Broad Portfolio for Client SSD

Outstanding Progress in Client SSD

OEMs qualifying 1Ynm SSDs

X3 SSD: launch in 2H’14 $26M

2010 2011 2012 2013

Revenue #2 Market Share

in 2013

Source: Market Share – Forward Insights ‟SSD Supplier Status 2013”, April 2014

2013 2014 2015 2016 2017

Business Consumer

Increasing Corporate Adoption Driving SSD Growth

Source: SanDisk Market

Intelligence

SSD Attach Rate to Notebooks

Enterprise Growing Rapidly

2010 2011 2012 2013

Revenue

Goal: $1+

Billion in 2016

Goal: #1

Share in 2017

SanDisk View of Industry Supply Trends

SanDisk Technology Leadership Strategy

Industry-leading roadmap: die sizes, reliability,

performance 2D NAND

BiCS technology development on target

BiCS Bit Cost Scalable 3D NAND

Enables sub-10nm scaling and new products 3D ReRAM 3D Resistive RAM

Considerations for Industry 3D NAND Conversion

3D Enables Continued Scaling of NAND

2D to 3D conversion: ~ 3–4x tool count of recent 2D NAND transitions

3D new capacity: 3D NAND process flow requires ~ 1.5x tool count of 2D NAND

Cleanroom space scales with tool count

Higher Capital Cost/Wafer

Highly complex process flow

Inspection capability, failure analysis

Device reliability

Manufacturing Learning

Lengthy qualification of new technology

Long tail of 2D for lower capacities

Gradual customer adoption

Market Adoption

Slower yield ramp

2D cost competitiveness sets the bar for 3D

Cost Effectiveness

Year 1 Year 2 Year 3 Year 4

Recent 2D transitions Initial 3D conversion

Industry Conversion to 3D NAND Slower than Transition of 2D

Year 1 Year 2 Year 3 Year 4 2015

Source: SanDisk estimate; 2D NAND 2xnm and below

Recent 2D Transitions Initial 3D Conversion

Industry Wafer Mix

2016 2017 2018

Industry 2D Wafer Output Potential Wafer Output

Expecting Modest Industry Wafer Output Growth

2010 2011 2012 2013 2014 2015 2016 2017 2018 2010 2011 2012 2013 2014 2018

Significant resources (Capital, Space, Engineers)

allocated to support 3D conversion

Industry Wafer Output

2010 2011 2012 2013 2014 2015 2016 2017 20182010

Industry Bit Growth Range

67% 74%

38% 40%

Expecting Modest Industry Bit Growth

2011 2012 2013 2014 2015 2016 2017 2018

NAND Industry in an Extended Stable Environment Even With Conversion to 3D NAND

Pervasive in Mobile Consumer Applications

Increasing Penetration in Personal Computing

Disrupting Legacy Enterprise Storage

Hyperscale Datacenters

Smart Connected Devices, IoT

Lower Bit Growth from 2D Scaling

Gradual 3D NAND Ramp

Increased Capex/wafer for Tech Transitions

Slowing Wafer Capacity Growth

ROI Considerations

Secular Demand Drivers

Moderate Supply Growth

Healthy Pricing

Environment

Extended Stability

Supporting Our Growth Plans

Fab Capacity Update

Expect to reach

2.8M WPY

by end of 2014

Less than

5% increase in

wafer capacity

from 2013

F5 P2 move-in

expected 2H’14

Space for BiCS

conversion under

consideration

expansion

19nm 1Ynm

conversion

development

19nm 1Ynm

conversion

1Ynm 1Znm

conversion

BiCS pilot

line, initial

production

Creating Captive SSD Manufacturing Facility

Advantages

Leveraging SMART Storage Systems presence

Cycle time benefits from SSD vertical integration

Strong technology supply base and resources

Maintain long-term captive/non-captive manufacturing capacity model target

Financial and tax benefits

Building a new manufacturing facility for SSDs in Penang, Malaysia

Add some

reference to

existing footprint

Target Production Start: Mid-2015

Key SanDisk Assets

Technology, Manufacturing, and System Expertise

Fundamental Intellectual Property

Global Brand Awareness

Solid Balance Sheet

Outstanding Team and Winning Culture

World’s First 128GB Mobile Card World’s First 4TB Enterprise SSD

Transforming How Mobile Devices Are Used

Transforming the Data Center

Innovation and Leadership: Product

World’s First 15nm Node

Innovation and Leadership: Technology

World’s Most Cost-effective NAND Technology

Masked

Note: Photo not to scale

Henri Richard

SanDisk’s Commercial Momentum

Senior Vice President, Worldwide Commercial Sales & Support

May 7, 2014

Agenda

First Year: Customer Observations

Executing Our Commercial Strategy

Growth Success Factors

The Next 12 Months

Observations

Pure play flash storage expertise

Vertical integration

Large-scale operating engine

Solid balance sheet

SanDisk Strengths

Observations

Premium brand

Strong record of innovation

Special position in our industry

SanDisk Strengths

Unified commercial sales

Deeper customer collaboration

Solve / design / build model

Observations

SanDisk Opportunities

Observations

Flash increasingly strategic

TAM expansion

Solid state storage

ROI awareness

SanDisk Opportunities

Positioning SanDisk to Serve the “3rd Platform” Phenomenon

Innovative Industry Solutions

Grew customer

facing head-

count more

than 25%

Added over

600 years of

OEM and

enterprise sales

experience

Qualcomm

Fusion-io

Western Digital

Seagate

Samsung

Lenovo

Size Experience Expertise

Highest

headcount

growth in

coverage of

new channels:

hyperscale

customers and

distribution

partners

Qualified at all

major Mobile

Device vendors

570% growth

with China OEMs

Qualified at

all Top 10

PC OEMs

200% growth

in Client SSD

Qualified at

6 of the Top 7

Enterprise

Storage vendors

99% Enterprise

SSD growth

Embedded Devices

Client Computing

Enterprise Computing

Added 14 new

distributors

Over 200 new

registered

partners in our

VARs and

resellers program

Distribution Channel

Growth Success Factors

Focus on China

ODM partnerships

Distribution channel

Hyperscale engagement

Ecosystem and solutions

The Secret Is Out… What’s Next ?

Market share gain

Customer premium platform penetration

Commercial branding campaign

Best-in-class sales infrastructure

Talent acquisition

John Scaramuzzo

Enabling the Flash Transformed Data Center

Senior Vice President and General Manager, Enterprise Storage Solutions

May 7, 2014

Recent Enterprise Highlights

Achieved record revenues in 2013 for Enterprise SSDs – Smart Storage acquisition – further expands product portfolio

– Multiple Hyperscale and Fortune 500 engagements

Product traction and new design wins – Optimus® SAS & CloudSpeed™ SATA SSDs adopted by top OEMs

– First design win on ULLtraDIMM™ and being tested by others

– Lightning® 12Gb/s SAS introduced

– World’s highest capacity SAS SSD announced – 4TB Optimus MAX™

Grew market reach – Added channel distribution with Avnet

– Global expansion with added sales resources in China and Europe

– Expanding ISV alliances to VMware, Microsoft, Nexenta & others

– Increased focus on hardware and software solutions

100 hours of video are uploaded to

YouTube every minute

Flash Expands the

Possibilities of

Storage in the

Enterprise

247 billion

emails sent

everyday

PayPal had

$14.8B total

payment volume on

eBay in Q1 2014

For High Frequency Traders,

1 millisecond lower latency = $100M

in revenue/year

Source: ecommerce: http://www.informationweek.com/wall-streets-quest-to-process-data-at-the-speed-of-light/d/d-id/1054287?; PayPal Fast Facts – Q1 2014;

https://www.youtube.com/yt/press/statistics.html, 2014

Widening

Performance Gap

1990 1995 2000 2005 2010 2015

Server CPU Performance

Challenge: Legacy Storage I/O Bottleneck

Source: StorageIOblog; Sep 2009; http://storageioblog.com/data-center-io-bottlenecks-performance-issues-and-impacts/

Performance

1990 1995 2000 2005 2010 2015

Server CPU Performance

Challenge: Legacy Storage I/O Bottleneck

Source: StorageIOblog; Sep 2009; http://storageioblog.com/data-center-io-bottlenecks-performance-issues-and-impacts/

Aligning

Performance

Additional Forces Challenging the Data Center

Instant resource provisioning is the new expectation

Performance challenge for shared storage infrastructure

Instant access

Memory-like speed performance

Need reduction in server and storage systems, power, cooling, and floor space

Private & Public Cloud Virtualization Service Delivery

Infrastructure

Near real-time results needed by business

Large data sets

Total Cost of Acquisition (TCA) = drives + enclosures + power supplies + …

In-Memory Computing New Math: $/GB

Replaced by TCA & TCO

Vertical Integration Matters: SanDisk Path to the Flash Transformed Data Center

Memory Design

Advanced System Design

Software Design

19nm 1Ynm

1Ynm 1Znm

3D NAND

Designed for high performance

Workload optimized

Mission-critical endurance

Runs applications faster

Enables larger in-memory datasets

Optimizes hardware efficiency

Leading Memory Cell Design Is Not Enough Need for Advanced Flash Management

Early Life End of Life

Data Integrity Threshold

Enterprise Performance Threshold

Guardian Technology™ Platform Enhances NAND Physics to Meet Enterprise Standards

Early Life End of Life

Aggregated Flash Management

Advanced Signal Processing

Data Integrity Threshold

Enterprise Performance Threshold Bit

Flash Transforms Applications Across the Tiers of the Data Center

TIER 3

TIER 0

TIER 1

TIER 2

Short stroked 15K HDDs

15K rpm HDDs

Legacy Storage Leading Edge Storage

Data Warehouse

Web Server Logs

Analytics

Indexing

Image Retrieval

Exchange Server

Caching

In-Memory Compute

VDI/ Virtual Server

VOD/ Media

Streaming

Content Repository

Web Search

Data Warehouse

Web Server Logs

Analytics

Indexing

Image Retrieval

Exchange Server

VDI/ Virtual Server

VOD/ Media

Streaming

Content Repository

Web Search

Caching

In-Memory Compute

Flash Transforms Applications Across the Tiers of the Data Center

TIER 3

TIER 0

TIER 1

TIER 2

Memory-Class (DDR and PCIe)

High Performance

(DDR, PCIe and SAS)

High Capacity (SAS and SATA)

Read-Intensive (Appliance)

TCA, TCO, Low Latency

PRIMARY & COMPUTE STORAGE

BIG CONTENT STORAGE

Attributes Key Value Metrics

Total Cost of Acquisition (TCA), TCO, IOPS

High IOPS

with Low Latency

Ultra Low Latency

SanDisk Offering Covers a Broad Set of Applications

SAS DDR

Tier 1, 2 Tier 0, 1

Tier 2

Tier 0, 1

IN DEVELOPMENT

Low Latency Matters Ultra Low Latency for Tiers 0 & 1

100’s

100 100,000 1,000,000

Breaking

Barrier

) 1’s

10’s

1000’s

DRAM Memory

L1/L2 Cache

10,000 Virtual Machine Deployment

ULLtraDIMM™

Virtual Desktop Consolidation Example Tier 0 & 1 — Metrics: Faster IOPS and $/Transaction

200 VMs/

Server

4x ULLtraDIMM 400GB

64GB DRAM

$99 per VM 50 Physical Servers

$986,950 TCA

57% reduction in Total Cost of Acquisition of servers and DRAM investment

700GB PCIe

384GB DRAM

100 VMs/

Server

$232 per VM 100 Physical Servers

$2,328,548 TCA

VMware® ESXi* VMware® ESXi*

Pricing based on quote for IBM x3650M4 from reseller General Microsystems—Nov 2013 *Full name: VMware® vSphere® ESXi

Density Matters Tier 2: Beyond Just Faster, Cooler, and More Power Efficient SSDs

Capacity

0.9 TB 1.2 TB

1.6 TB

SanDisk Enterprise SSDs Continue to Deliver Density Growth While Mission Critical HDD Density Hits a Wall

Today’s World’s highest

capacity SAS SSD

10K SAS HDDs

100TB of Database Storage with

>150K IOPS

Database Management System Example Tier 2 — Metrics: $/IOPS and TCO

1875K IOPS

25 SSDs @ 4TB

$0.07 per IOPS TCA $104,214 (w/o SW)

TCO $124,609 over 3 years

60% reduction in Total Cost of Acquisition 58% reduction in Total Cost of Ownership

685 HDDs @ 146GB

151K IOPS

$1.98 per IOPS TCA $257,484 (w/o SW)

TCO $298,587 over 3 years

Microsoft SQL Microsoft SQL

Source: Based on Dell PowerEdge pricing www.dell.com/us/business/p/poweredge-r720/fs along with HDD studies “Failure Trends in a Large Disk Drive Population” and “Disk failures in the real world”: proceedings of 5th USENIX Conference on File and Storage Technologies and incorporated into TCO model developed by SanDisk architect Fritz Kruger—December 2013

85U of

Response Time Matters — with TCA, TCO Tier 3: Active Content Repository System Example

Lower Power Less Cooling

Smaller Footprint

Response Time

Low TCA

FlashSoft®

Software

Places “hot data” on SSD caches on each server node

Compensates for slower tier of direct-attached and networked storage

Schooner® Software

Uses object technology to group storage bits together

Key value store shortens access time to manipulate files & speeds up DB performance

Software Defined Storage

cache cache cache

Storage Storage Storage

AVAILABLE MID-2014

Removing Software Bottlenecks Increasing ROI for Application Performance

In-Memory Compute

Big Data Analytics

– NoSQL Databases

• Cassandra and MongoDB

– Hadoop

Object Storage Servers 0.7

HDD SSD SSD + Schooner

TPS per Server in Thousands

128GB 1K data

24 core Westmere, 96GB DRAM, 8 x 128GB SSD @ 1K data

YCSB measurements performed by SanDisk

Software Application Acceleration

20x Improvement

Schooner ® Software

3x Improvement

Enterprise Engagements

Addressing Broad Market Needs

Traditional Server / Storage OEMs Hyperscale / Cloud

General purpose performance

and endurance Performance and endurance tuned

for specific applications

Highest performance on

diverse workloads

Broad, leveraged offering

Faster storage response

time for customer experience

and revenue

Optimized products for

high-scale deployments

Common Architecture

Vertical Integration

Key Customer Engagements as of Mid-2013

SATA SAS

Server & Storage

Design Win Evaluating

Hyperscale

Customers

Key Customer Engagements Today

SATA SAS

Server & Storage

Hyperscale

Customers

Design Win Evaluating

74Investor Day 2014 | May 7, 2014

Enterprise SSD Industry TAM Coverage

Mid-2013 2017

$ in B

Source: SanDisk estimates

Vertical integration matters – enables optimized solutions

Low latency matters – high performance economics

Density matters – total cost of acquisition

Software matters – removing the final bottlenecks

SanDisk Is Leading the Way to the Flash Transformed Data Center

Dr. Siva Sivaram

Delivering Technology Leadership

Senior Vice President, Memory Technology

May 7, 2014

Industry-leading roadmap: die sizes, reliability,

performance

BiCS technology development on target

Enables sub-10nm scaling and new products

SanDisk Technology Leadership Strategy

2D NAND

3D ReRAM 3D Resistive RAM

SanDisk Technology Roadmap

2D NAND

3D ReRAM 3D Resistive RAM

2013 2014 2015 2016 2017

ReRAM Technology Development

X2, X3

3D Production BiCS

2D NAND

SanDisk Cost Leadership

SanDisk Company A Company B Company C

Consistently Smallest Chip Sizes in the Industry

2011 2012 2013 2014 2015Now

mm2/GB mm2/GB

2011 2012 2013 2014 2015Now

Source: Company published information and SanDisk estimates

Yield Learning Rate Across Generations

Faster Yield Ramp Despite Increasing Technology Complexity

24nm 19nm

% Yield

Cell X, nm

Cell Y, nm

Excellent Reliability Even While Scaling

Note: Die photos and arrows not to scale

Lithographic limits

Proximity Effects

Wear-out mechanisms

Number of electrons per state

Cell X, nm

Cell Y, nm

SanDisk 1Z: World’s First 15nm Node

Lead chips: 128 Gb X2 and 128 Gb X3

Both X2 and X3 are the two smallest 128 Gb chips in the world

Sampling now; production ramp 2H’14

Both X2 and X3 are suitable for broad applications and markets

– Density, endurance, retention, power, and performance

1Z 128 Gb die photo

Note: Photo not to scale

Masked

Cell X, nm

Cell Y, nm

24nm 19nm

1Y X3 Product Reliability: Best in Class

Fresh End of Life

SanDisk

Competitor

Source: SanDisk internal measurements

Enabling New Form Factors and Densities with Packaging

16 Die iSSD

32 Die SDXC™

16 Die microSDXC™

2D NAND Summary

SanDisk 2D NAND leadership continues with 1Z

Consistently smallest chip sizes in the industry

Rapid technology learning even with increasing complexity

Industry-leading reliability and performance

3D NAND: BiCS

3D NAND FLASH: Why?

2D NAND

Note: Die photos and arrows not to scale BiCS

No lateral

coupling

Small vertical

coupling

Strong lateral

coupling

NAND Technology Scaling: 2D and 3D

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

BiCS Min Feature size

BiCS, F= 0.5 𝑪𝒆𝒍𝒍𝒔𝒊𝒛𝒆

#𝒍𝒂𝒚𝒆𝒓𝒔

Log (Node, nm)

2D NAND, F = Half pitch

= 0.5 √𝑪𝒆𝒍𝒍𝒔𝒊𝒛𝒆

3D NAND: Manufacturing Considerations

Constant capacity assumed; SanDisk internal data

Additional Tools Needed

for Conversion

Conversion Time

2–3x

2D BiCS

3–4x

2D BiCS

Additional Space Needed

for Conversion

2D BiCS

Competitor 3D NAND SanDisk 1Z SanDisk BiCS

Technology Migration Path

BiCS Gen 2: Pilot and Production

BiCS Gen 3: Production Estim

Customer Applications (Capacity, Removable, Embedded, SSD, Enterprise)

Note: Figure not to scale

Source: Estimates based on published 3D NAND data

3D NAND Summary

BiCS Gen 1: Cell, integration, and yield learning vehicle

BiCS Gen 2: Development on track for pilot production in 2H’15

BiCS Gen 2: X2 and X3 production ramp in 2016

3D Resistive RAM (3D ReRAM)

Scalable Below 10nm; New Product Categories

Lower Latency

Scaling Potential

Higher Endurance

3D Stacking Lower

Power/Energy

3D ReRAM

SanDisk 2D NAND leadership continues with 1Z

BiCS 3D NAND development is on track; pilot production expected in 2H’15

3D NAND adoption moderated by technology, manufacturing, and customer learning rates

3D ReRAM is capable of scaling below 10nm

Key Technology Takeaways

Judy Bruner

Driving Shareholder Value

Executive Vice President, Administration & Chief Financial Officer

May 7, 2014

Agenda

Review of Results

Financial Model Update

Attractive Revenue Growth

$3,567

$4,827

$5,662

$5,053

$6,170

2009 2010 2011 2012 2013

$ in Millions

CAGR of 15% from 2009 to 2013

9% 19%

5% 16%

25% 24%

27% 20%

78% 69%

58% 53%

43% 40%

16% 14% 14% 14% 11% 12%

2009 2010 2011 2012 2013 Q1'14

SSD Embedded Removable Other

Significant Evolution of Revenue Mix

Other Revenue includes License & Royalty, Wafers & Components and Accessories.

2010 2011 2012 2013

Average GB Capacity/Unit

Average Capacity Growth Has Accelerated Over Last 3 Years

Improving Product Mix and Healthy Industry Environment Strong and More Consistent GM%

47% 50% 51% 51%

Q1'13 Q2'13 Q3'13 Q4'13 Q1'14

47% 44%

2009 2010 2011 2012 2013

Gross Margin is non-GAAP—See appendix for non-GAAP to GAAP definitions and reconciliations.

$562, 11% $691, 11%

$209, 4%

$257, 4% $135, 3%

$173, 3%

2012 2013

$ in Millions, % of Revenue

R&D S&M G&A

$906, 18%

$1,121, 18%

Operating Expenses by Function

Key Growth Drivers

Expenses are non-GAAP—See appendix for non-GAAP to GAAP definitions and reconciliations.

Infrastructure Growth

Expansion in Commercial

Sales & Support

Growth in System/Product

and 3D Technologies

Record 2013 Operating Income Operating Margin = 25.5% Over 5 Years

$1,553 $1,637

$1,806 18%

2009 2010 2011 2012 2013

$ in Millions

Operating Income Operating Margin

Operating Income and Operating Margin are non-GAAP—See appendix for non-GAAP to GAAP definitions and reconciliations.

Operating Margin Robust in Seasonal Q1

$368 $288

$429 $533 $556

33% 32% 32%

Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14

$ in Millions

Operating Income Operating Margin

Operating Income and Operating Margin are non-GAAP—See appendix for non-GAAP to GAAP definitions and reconciliations.

2013 Capital Investments

Capital Investments 2012 2013 Comments

Tech Transitions $356 $583 19nm + initial 1Ynm transition

Productivity Improvements 0 44 Bottleneck tools/upgrades; 2.7M wfr capacity end yr

New Capacity 113 0

Development Tools 22 19

JV Fab Totals 491 646

Non-Fab PP&E 488 213 Assembly/Test, R&D, Facilities, IT

Total Capital Investments $979 $859

Funding 2012 2013 Comments

JV Operating Cash Flow 230 721 $528 depreciation, $312 decrease in working capital/other, ($119) lease buyouts

JV Operating Lease Funding 580 0

Net Cash Outlay 169 138 $213 Non-Fab PP&E less $75 cash from JVs

Total Funding $979 $859

$ in Millions

Record Free Cash Flow in 2013 FCF = 18% of Revenue Over 5 Years

$1,344

$1,726 13%

2009 2010 2011 2012 2013

$ in Millions

FCF FCF % of Revenue

Free Cash Flow = Cash Flow from Operations Less Investments in Property & Equipment and Net Cash Flows related to Investments & Notes Receivable with Flash Ventures.

2013 Pro-Forma Cash Flow Pro-Forma Cash Flow represents estimated cash flow if SanDisk portion of Flash Ventures was consolidated

SanDisk as Reported

JV Adjustments

SanDisk Pro-Forma

Depreciation 528

Working Capital Decrease 272

FX & Other at JVs 40

Cash Flow from Operations $1,864 $840 $2,704

Investment in PP&E (213) (646) (859)

JV Return of Cash to SanDisk 75 (75) 0

Lease Buyouts (119) (119)

Cash Flow from Capital Investing ($138) ($840) ($978)

Free Cash Flow $1,726 $1,726

$ in Millions

Working Capital Decrease is SanDisk share of JV working capital decrease including change in cash.

Free Cash Flow = Cash Flow from Operations Less Investments in Property & Equipment and Net Cash Flows related to Investments & Notes Receivable with Flash Ventures.

Strong ROIC

SNDK WACC SNDK Wafer Fabs LTD IRR SNDK 2013 ROIC

WACC = Weighted Average Cost of Capital; IRR = Internal Rate of Return.

SNDK 2013 Return on Invested Capital (ROIC) = non-GAAP NOPAT divided by Invested Capital. NOPAT = Net Operating Profit After Tax.

Invested Capital = Avg beg & end of year of [Working Capital + Fixed Assets + Fab Investments].

SNDK Wafer Fabs LTD ROIC: Life to date cash flows through 2013, with allocation of expenses, assuming Fab tools sold at end of 2013 for NBV less 5% selling costs.

See Appendix for reconciliation of non-GAAP NOPAT to GAAP NOPAT.

Improved from 12%

2 years ago

Agenda

Review of Results

Financial Model Update

Update on Technology Transitions

32nm 24nm 19nm 1Ynm 1Znm

Capex $/Wafer GB/Wafer Growth % Flash Cost/GB Improvement %

Capex reflects tool costs only, not clean room costs.

Expect the 1Z Transition to Generate Similar Bit Growth &

Cost Reduction Compared to 1Y

Impact of Initial Transition to BiCS Gen 2 + 3

Factors Comparison to

1Z Transition

Impact on Cost Reduction Compared

to 1Z Transition

Annualized Comparison to 1Z 1Z Transition ~18 mos

Initial BiCS Transition ~36–48 mos

Capex/Wafer Higher Shallower Similar to Somewhat Higher

GB/Wafer Growth Higher Stronger Similar

Transition Time Longer Shallower

X3 Mix Similar or Higher Similar/Stronger

Overall Annualized Flash Cost Reduction for Initial BiCS Transition Expected to Be Similar to 1Z Cost Reduction

15–25% 15–25% 15–25%

2009 2010 2011 2012 2013 2014E 2015E 2016E

Expect Total Cost Reduction to Remain in Similar Range 2014–2016

Cost/GB uses non-GAAP Cost of Revenue—See appendix for non-GAAP to GAAP definitions and reconciliations.

Total Cost/GB Reduction % – including all flash and non-flash costs

77% 86%

25–35% 30–40% 25–35%

2011 2012 2013 2014E 2015E 2016E

SanDisk Supply Bit Growth

Wafer Capacity

1Y across yr; 1Z begins

Small 1Y addition; 2.8M wafer capacity end of year

1Z across year

Full yr impact 2014 addition; Possible small 1Z addition

BiCS Gen 2

No anticipated addition beyond productivity improvements

Primary Tech Transition

Consistent Bit Growth Ranges

2014 Capital Investments

Capital Investments 2013 2014E Comments

Tech Transitions $583 $650 1Y and 1Z

Productivity Improvements 44 0

New Capacity 0 200 <5% wafer capacity addition

Development Tools 19 150 Development tools for BiCS

JV Fab Totals 646 1,000

Non-Fab PP&E 213 400 Malaysia & Bangalore facilities, Ops, R&D, IT

Total Capital Investments $859 $1,400

Funding 2013 2014E Comments

JV Operating Cash Flow 721 450 Depreciation less lease buyouts

JV Operating Lease Funding 0 350

Net Cash Outlay 138 600

Total Funding $859 $1,400

$ in Millions

Capital Investment Expected to Be 20%–30% of Revenue for 2014 and Beyond

2014 Capital Investment as % of Revenue calculated using mid-point of forecasted revenue range.

$1,052 $1,368

$979 $859

$1,400

22% 24%

2010 2011 2012 2013 2014E

$ in Millions

Capital Investments % of Revenue

2014 Outlook: Forecasting Continued Strong Profits

$ in Millions 2013 Q1 Actual Q2 Outlook 2014 Outlook Comments

Revenue $6,170 $1,512 $1,550–$1,625 $6,400–$6,800 +4%–10% Y/Y

GM% 47.4% 51.2% 47%–49% 47%–49%

Embedded mix reduces GM% in Q2–Q4 compared to Q1

Similar to better than 2013

Opex$ $1,121 $297 $315–$325 $1,250–$1,275

Opex% 18.2% 19.6% 19%–21% 18%–20%

OM% 29.3% 31.5% 26%–30% 27%–31%

Gross Margin, Operating Expense $ and %, and Operating Margin are non-GAAP—See appendix for non-GAAP to GAAP definitions and reconciliations.

Financial Model Evolution

LTFM was introduced in Feb 2010 to define: – Average OM% over time to optimize growth, profits and cash flow

– OM% required for solid ROIC on fab investments

Financial model has become stronger and more consistent – Diversified and stronger product portfolio

– Disciplined capacity management

– Leadership in technology cost

Evolving from LTFM to Target Financial Model – “Long-Term” qualifier no longer needed

– Results consistently exceeding solid ROIC on fab investments

LTFM = Long-Term Financial Model

% of Revenue Current

LTFM 2013

Results 2014 Outlook

Updated TFM

Comments

GM% 38%–44% 47.4% 47%–49% 45%–51% Evolution of portfolio, commitment to disciplined capacity management

R&D 9%–11% 11.1% 11%–12% 11%–12% Growing investment in higher value solutions plus future memory technologies

S&M ~5% 4.2% 4.5%–5% ~6% Increasing Commercial Go-To-Market spend

G&A ~3% 2.8% 2.5%–3% ~3%

Opex% 17%–19% 18.2% 18%–20% 20%–21% Investment in growth opportunities

OM% 21%–25% 29.3% 27%–31% 25%–30% Annual Target Financial Model

Target Financial Model Evolution—P&L Financial Model to optimize growth + profits + cash flow

All percentages are non-GAAP—See appendix for non-GAAP to GAAP definitions and reconciliations.

Elements of Target Financial Model

Capital Investments

20%–30% of Revenue

Operating Margin

25%–30%

15%+ of Revenue

Operating Margin is non-GAAP—See appendix for non-GAAP to GAAP definitions and reconciliations.

Optimal Mix of

Growth Profits

Cash Flow

SanDisk Balance Sheet Enables Strategic Flexibility + Strong Capital Return

$1,791

$3,193 $3,687 $3,783 $3,585 $3,818

$1,225

$2,150 $1,928 $1,928 $2,500

$2,500

2009 2010 2011 2012 2013 Q1'14

$ in Millions

Net Cash Debt

$3,016

$5,343 $5,615 $5,711 $6,085

$6,318

Net Cash = [Cash + Cash Equivalents + Short-term and Long-term Marketable Securities] LESS [Debt Value at Maturity].

Gross Cash = Net Cash + Debt

SanDisk Ventures: Promoting Innovation in Use of Flash

Strategic Investments: $707 Million Last 3 Years

Acquisitions:

Building

Enterprise

Capability

Capital Return Program: Over $2B in 2.5 Years (Q4’11–Q1’14)

$2,497

$2,732

$2,066

Non-GAAP Net Income Free Cash Flow Capital Return(Share repurchase + dividends)

Net income is non-GAAP—See appendix for non-GAAP to GAAP and Free Cash Flow definitions and reconciliations.

Share repurchases reflects shares repurchased under the program without cash used for settlement of employee taxes on vesting RSUs.

$ in Millions 76%

of FCF

Share Repurchase Program to Date

Authorized Share Repurchase

Program

Repurchases Q4′11 thru Q1′14

incl ASR (1)

Remaining Authorization

Cash Used for Share Repurchases ($M) $3,750 $1,913 $1,837

Shares Repurchased (in Millions) 32.3

Average Cost per Share $59.18

6% Net Reduction in Shares Outstanding Over 2.5 Years

Excludes cash used and shares withheld for settlement of employee taxes on vesting RSUs.

(1) Includes final settlement of 623K shares received in April 2014 for 2013 ASR.

Dividend Program

For dividends declared beginning in Q3 FY14, quarterly dividend per share will be increased to

$0.30/share, +33%

New annualized cost ~$275M

Dividend Rate to Be Increased One Year from Program Initiation

Future dividends are subject to declaration by our Board of Directors and may be adjusted due

to future business needs or other factors deemed relevant by the Board of Directors at that time.

Consolidated Capital Return Program

2014 Objective Is:

Share Repurchases

Dividends + = 100% of FCF

Will Evaluate Program Goals Annually, Considering M&A and Other Opportunities

Driving Shareholder Value

Delivering excellent financial results

Increasing consistency of financial model

Best-in-class capital return program

Q&A SanDisk Executive Team

Sanjay Mehrotra

Expanding the Possibilities of Storage

President & Chief Executive Officer

May 7, 2014

Over 90% of SanDisk Employees Worldwide

Participated in Community Service

in 2013

Light the Night Walk Benefitting The Leukemia & Lymphoma Society

SanDisk India Partners with the Sankara Eye Foundation

SanDisk Israel Volunteer at Muzot Arts High School

SanDisk US Packages Food for Stop Hunger Now

SanDisk Leads a Habitat for Humanity House Build in San Jose

SanDisk China Lantern Festival with Shanghai Minhang School

for Children with Disabilities

SanDisk US Teach After-school Robotics in San Jose

Thank You

Appendix

Financial Definitions and Notes

Cost/GB: All cost per GB metrics are computed using Non-GAAP Cost of Revenue. Total Cost Reduction calculated using Non-GAAP Cost of Revenue was adjusted as follows:

2008: Excludes inventory reserves, fab impairment charges, and accruals for 2009 fab underutilization

2009: Excludes inventory reserve benefits, and includes all costs for 2009 fab underutilization

Free Cash Flow (FCF): [Cash Flow from Operations] LESS [Cash Used for Capex + Fab Joint Venture Investments]

Net Cash: [Cash + Cash Equivalents + Short-term & Long-term Marketable Securities] LESS [Debt Value at Maturity]

NOPAT: Net Operating Profit After Tax is [Operating Profit] * [1 – Effective Tax Rate]

Reconciliation of Non-GAAP to GAAP Statements of Operations Twelve months ended January 3, 2010 (in thousands, except percentages and per share amounts, unaudited)

Reconciliation of Non-GAAP to GAAP Statements of Operations Three months ended January 1, 2012 (in thousands, except percentages and per share amounts, unaudited)

Reconciliation of Non-GAAP to GAAP Statements of Operations Three months ended April 1, 2012 (in thousands, except percentages and per share amounts, unaudited)

Reconciliation of Non-GAAP to GAAP Statements of Operations Three months ended July 1, 2012 (in thousands, except percentages and per share amounts, unaudited)

Reconciliation of Non-GAAP to GAAP Statements of Operations Three months ended September 30, 2012 (in thousands, except percentages and per share amounts, unaudited)

Reconciliation of Non-GAAP to GAAP Statements of Operations Three months ended December 30, 2012 (in thousands, except percentages and per share amounts, unaudited)

Reconciliation of Non-GAAP to GAAP Statements of Operations Twelve months ended December 30, 2012 (in thousands, except percentages and per share amounts, unaudited)

Reconciliation of Non-GAAP to GAAP Statements of Operations Three months ended March 31, 2013 (in thousands, except percentages and per share amounts, unaudited)

Reconciliation of Non-GAAP to GAAP Statements of Operations Three months ended June 30, 2013 (in thousands, except percentages and per share amounts, unaudited)

Reconciliation of Non-GAAP to GAAP Statements of Operations Three months ended September 29, 2013 (in thousands, except percentages and per share amounts, unaudited)

Reconciliation of Non-GAAP to GAAP Statements of Operations Three months ended December 29, 2013 (in thousands, except percentages and per share amounts, unaudited)

Reconciliation of Non-GAAP to GAAP Statements of Operations Twelve months ended December 29, 2013 (in thousands, except percentages and per share amounts, unaudited)

Reconciliation of Non-GAAP to GAAP Statements of Operations Three months ended March 30, 2014 (in thousands, except percentages and per share amounts, unaudited)

Summary of Q2’14 and FY2014 Forward Non-GAAP and GAAP Guidance Provided at May 7, 2014 Investor Day (1) With Non-GAAP to GAAP Reconciliation

(in millions, except for percentages)

Reconciliation of GAAP Consolidated Cash Flows from Operations to Free Cash Flows

(in thousands, unaudited)

Reconciliation of Non-GAAP to GAAP NOPAT Twelve months ended December 29, 2013 (in thousands, except percentage, unaudited)

SanDisk, the SanDisk logo, SanDisk Ultra, SanDisk Extreme, iNand Ultra and iNand Extreme are trademarks

of SanDisk Corporation, registered in the U.S. and other countries. Optimus and Lightning are trademarks

of SanDisk Enterprise IP, LLC, registered in the U.S. and other countries. iSSD is a trademark of SanDisk

Corporation. Cloudspeed, Guardian Technology, Optimus Max and ULLtraDIMM are trademarks of SanDisk

Enterprise IP, LLC. The microSD, microSDHC, microSDXC, SD, SDHC and SDXC marks and logos are

trademarks of SD-3C, LLC. Other brand names mentioned herein are for identification purposes only and

may be the trademarks of their respective holders.

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