Samsung Warns the Global Memory Shortage Will Worsen in 2027 and Persist Through 2028

Samsung Electronics told analysts on its Thursday, July 30 earnings call that the global memory chip shortage pushing up prices across data centers, PCs, and smartphones is not close to over. Jaejune Kim, executive vice president of Samsung’s memory business, said supply constraints are expected to become more severe in 2027 than they were in 2026, and that tight conditions will persist through 2028, according to The Register and TechCrunch. Samsung supplies roughly a third of the world’s memory chips, so a shift in its own outlook carries weight for a market that touches nearly every category of computing hardware.

Why Samsung Says Relief Is Still Years Away

Kim laid out the timeline plainly for analysts on the call, which covered the quarter ended June 30, 2026. “Based on the incoming requests that we have been seeing from the customers, unmet demand from this year is likely to carry over into the following year, contributing to tighter supply conditions going forward,” he said, according to The Register. “The supply constraints are expected to become even more severe in 2027 than 2026, reinforcing our view that the supply shortage will persist through 2028.”

The bottleneck is physical, not just financial. Kim said the lead time from starting construction on a new fab to actually producing wafers exceeds three years, meaning it will be “unlikely to see any significant increase in incremental supply through 2028” even as the industry keeps investing in new capacity. Samsung told analysts its visibility beyond 2029 is limited, according to Android Authority.

The demand side of the equation has shifted too. Agentic AI, in which models take multi-step actions rather than just answering single prompts, has added to the memory demand already generated by training frontier models, Samsung said. Frontier AI labs have begun sharing their “medium- to long-term demand forecasts” directly with Samsung to help secure future supply, the company told TechCrunch.

A Record Quarter With a Split Personality

The shortage has been extraordinarily good for Samsung’s chip business and extraordinarily painful for its phone business, often within the same balance sheet. The semiconductor division posted 89.2 trillion won (about $61.7 billion) in operating profit for the quarter, more than 250 times what it earned a year earlier, according to Technology.org. Company-wide operating profit reached 89.5 trillion won (roughly $62 billion), more than 19 times the year-ago figure, on revenue of 171.5 trillion won ($119 billion), which was up 130 percent year over year.

Samsung’s mobile division, meanwhile, posted a 700 billion won loss, the first losing quarter in its history. DRAM and NAND flash are inputs Samsung’s phone unit has to buy at the same elevated prices its chip unit is charging everyone else. Josh Gilbert, an analyst at eToro, summed up the tension: “The chips enriching one side of Samsung are now hurting the other, leaving the group more exposed than ever to memory pricing and the durability of hyperscaler demand.”

Locking Customers Into Multi-Year Contracts

Rather than let the cycle run its usual boom and bust course, Samsung is trying to convert the current spike into something closer to a subscription business. The company has signed long-term supply agreements with the world’s top five data center operators and is close to deals with five more, covering 60 to 70 percent of its capacity, according to Technology.org. The contracts run at least five years and include upfront payments and floor pricing.

“Customers who want to secure substantial AI service infrastructure are increasingly approaching us for multiyear supply,” Kim told analysts, according to The Register. “These multiyear arrangements actually are aligned with our objective of hedging our mid- to long-term risk. And so we have been engaging in discussions with customers, prioritizing those who can guarantee committed future captive demand.”

High-bandwidth memory is central to that strategy. Samsung expects HBM4 revenue to more than triple in the third quarter, with Nvidia and AMD among its HBM customers. Rival SK Hynix delivered a similar warning about 2027 earlier in July and said it plans to raise capital spending by around 50 percent this year. Ryu Young-ho, a senior analyst at NH Investment & Securities, told Technology.org that management’s commentary on the call “was better than expected, and it was one of the more reassuring calls we’ve heard in quite some time.”

What It Means for Buyers

The pricing pressure is already visible outside Samsung’s own earnings. Apple has raised the prices of its MacBooks, Macs, and iPads because of the shortage, and separately told investors that revenue growth for the current quarter is projected to slow to between 9 and 11 percent year over year, down from a recent run rate of about 16 percent, according to TechCrunch. Nvidia is expected to raise consumer graphics card prices by 20 to 30 percent, which would likely ripple into the cost of gaming PCs, consoles, and laptops.

Samsung, SK Hynix, and Micron together control more than 95 percent of global DRAM output, according to Technology.org, and all three have been shifting wafer capacity toward the more profitable HBM used in AI servers instead of the commodity DRAM and NAND that go into consumer devices. New memory fabs cost $15 billion to $20 billion and take years to build, so that allocation decision cannot be reversed quickly even if consumer demand eases.

What to Watch Next

Samsung’s own Taylor, Texas fab is on track to begin operations later this year, and the company aims to break ground on a second fab at the same site, with mass production possible in 2030, according to Technology.org. Until new capacity like that reaches volume production, Samsung’s own numbers suggest that elevated prices for phones, laptops, and other memory-hungry devices are likely to be the default, not the exception, through at least 2028.