The world’s largest semiconductor-maker is reaping the rewards of a global memory chip shortage driven by AI demand so rapacious that it’s making everyone else miserable.
Samsung said in its latest earnings report that it saw record profits, up almost 500% from the same period last year, to $31.72 billion. The figure was boosted by a nearly 50-fold increase in revenue from its chip business.
The company has sold out all of its memory production capacity for the rest of this year and says that shortages, which are driving up prices of everything from laptops to smartphones to external storage devices to gaming consoles, will get worse in 2027. That, in all likelihood, will continue to increase prices for tech devices and begin affecting the shopping behavior of millions of consumers.
In an investor call for its earnings report, one of the company’s memory chip executives, Kim Jaejune, said, “Based solely on the demand currently received for 2027, the supply-to-demand gap for 2027 is set to widen even further than in 2026.”
Long-term memory loss
Memory prices began increasing significantly last year as a boom in data centers supporting AI companies gobbled up vast supplies of memory used to power the hardware that processes all their data. That, in turn, led to global shortages and price spikes that are still being felt and that — according to Samsung — won’t ease up anytime soon.
Samsung is trying to keep up with demand from companies, including Nvidia, even as it competes with those same companies, which are also producing their own semiconductors. Apple, Microsoft and Alphabet are among the world’s top memory makers, but they’re also customers of Samsung and can’t produce the amount of memory required to meet their growing needs themselves.
What the company’s chip executives are saying about a prolonged memory shortage aligns with what analysts, other companies and chip-production capacity data already confirm, said Quandary Peak Research executive vice president and former Samsung executive Mahdi Eslamimehr.
“New fab capacity remains years away, and existing lines are being reallocated to HBM (high bandwidth memory) and enterprise DDR5, structurally squeezing commodity supply,” Eslamimehr said.
Samsung’s earnings, he added, “reflect a genuine AI-driven supercycle rather than a fleeting spike.”
To make matters worse, he said, Samsung has binding, multi-year contracts with some of its customers that help secure its moneymaking, but also leave very little flexibility for non-AI memory production.
Hold that upgrade…
Meanwhile, for people buying tech products, phones and PCs will continue to get more costly with no relief in sight. That, in turn, means people may hold on to their devices longer before replacing them, delay new purchases, and opt for lower-cost, less powerful technology if they’re price-sensitive.
“While Samsung and its AI customers thrive, everyday consumers will pay more for phones, laptops, SSDs and gaming hardware, with the pain most acute in the budget and midrange segments that drive volume,” Eslamimehr said.
