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The world’s largest semiconductor manufacturer is reaping the rewards Global shortage of memory chips Driven by a demand so greedy for AI that it makes everyone miserable.
Samsung said in its latest earnings report It saw record profits, up nearly 500% from the same period last year, to $31.72 billion. This figure was boosted by a nearly 50-fold increase in revenue from its chip business.
The company has sold all of its memory production capacity for the rest of this year, and says the shortage, which is driving up prices of everything from Laptops to Smartphones to External storage devices to Gaming consoles, will It gets worse in 2027. This, in all likelihood, will continue to increase the prices of tech devices and begin to influence the shopping behavior of millions of consumers.
In a call to investors for the company’s earnings report, Kim Jae-jun, one of the company’s memory chip executives, said: “Based solely on the demand currently being received for 2027, the supply-demand gap for 2027 is set to widen more than in 2026.”
Long-term memory loss
Memory prices started rising significantly last year Boom in data centers AI-supporting companies have captured vast amounts of memory used to run the machines that process all of their data. This in turn has led to global shortages and a price hike that is still being felt, which – according to Samsung – will not abate anytime soon.
Samsung is trying to keep up with demand from companies, including Nvidia, even as it competes with those same companies, which also produce their own semiconductors. These companies include Apple, Microsoft, and Alphabet Top of the world Memory makers, but they are also customers of Samsung and cannot produce the amount of memory required to meet their growing needs themselves.
What the company’s chip executives are saying about the prolonged memory shortage is in line with what analysts, other companies and chip production capacity data are already confirming, said Quandary Peak Research’s executive vice president and former Samsung executive. Mehdi Al-Islamiher.
“New production capacity is still years away, and existing lines are being reallocated to HBM (High Bandwidth Memory) and DDR5 for enterprises, which is structurally putting pressure on commodity supplies,” Eslami Mehr said.
He added that Samsung’s profits “reflect a true AI-driven supercycle and not a fleeting spike.”
To make matters worse, he said, Samsung has binding, multi-year contracts with some of its customers that help secure money, but also leave very little flexibility for non-AI-powered memory production.
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Meanwhile, for people who buy tech products, phones and computers will continue to rise with no solution in sight. This in turn means that people may keep their devices longer before replacing them, delay new purchases, and choose less expensive and less powerful technology if it is price sensitive.
“As Samsung and its customers thrive in AI, mainstream consumers will pay more for phones, laptops, SSDs and gaming consoles, with the most acute pain in the budget and mid-volume segments,” Islamiher said.
