Seoul: Samsung Electronics has warned that the global memory chip shortage is likely to intensify and continue until 2028, driven by surging demand from artificial intelligence (AI), cloud computing and data centres. The company said it is securing long-term supply agreements with major customers to ensure stable deliveries amid tightening semiconductor availability.
The outlook came as Samsung reported a massive jump in its semiconductor earnings for the second quarter of 2026, highlighting the strong demand for AI-focused memory chips despite concerns over a slowdown in technology spending.
Samsung expects shortages to worsen
Samsung said the supply-demand imbalance in the memory chip market is expected to become even more severe in 2027 before extending into 2028.
According to the company, the rapid expansion of AI infrastructure, hyperscale data centres and high-performance computing has significantly increased demand for advanced memory chips, outpacing manufacturing capacity.
Long-term supply deals with customers
To manage future demand, Samsung revealed that it has already signed multiple long-term supply agreements with major customers.
The company said around 60–70% of its production capacity has been committed through long-term contracts. Samsung has reportedly finalised agreements with five major customers and is negotiating similar deals with several others to ensure supply stability.
AI boom driving demand
Samsung attributed the prolonged shortage primarily to the explosive growth of artificial intelligence applications.
The increasing deployment of AI models, cloud services and advanced computing systems has sharply increased demand for High Bandwidth Memory (HBM) and other advanced DRAM products used in AI accelerators and servers. This demand has exceeded the pace at which chipmakers can expand manufacturing capacity.
Strong quarterly performance
The semiconductor division posted a sharp rise in profitability during the second quarter of 2026.
Samsung’s chip business recorded operating profit of 89.2 trillion won, supported by higher memory prices and sustained demand from AI customers. Overall company revenue and net profit also reached record levels during the quarter.
Consumer electronics may feel the impact
Industry analysts believe prolonged chip shortages could affect the availability and pricing of consumer electronics.
Products such as smartphones, laptops, servers and other AI-enabled devices may experience higher component costs if supply remains constrained over the next two years. Manufacturers are increasingly entering long-term procurement agreements to minimise disruption.
Samsung expands production
To meet rising demand, Samsung is continuing to invest in expanding its semiconductor manufacturing capacity.
The company has also announced plans to strengthen its production footprint, including additional investments in fabrication facilities, while increasing output of advanced AI memory chips.
Conclusion
Samsung’s latest outlook suggests that the global semiconductor industry will continue facing supply constraints well beyond 2026. With AI adoption accelerating across industries, demand for advanced memory chips is expected to remain exceptionally strong, prompting manufacturers and customers alike to secure long-term supply arrangements.