Samsung Electronics has recently warned that the ongoing global memory chip shortage is likely to continue through 2027. They further added that the chipset shortage may stretch into 2028 as well because the demand for artificial intelligence keeps rising. According to the company, major tech firms are still investing heavily in AI infrastructure, which is creating strong demand for memory chips used in data centres and servers. According to reports, the South Korean tech giant has signed long-term supply agreements with leading global customers to secure future business. These agreements are expected to strengthen Samsung’s market position while helping customers plan long-term production needs despite persistent supply constraints worldwide ahead.
Samsung expects demand for memory chips to remain high because companies continue to expand AI services. The company believes the market will stay short of supply as more businesses build data centres and increase the use of AI tools.
Jaejune Kim, executive vice president of Samsung’s memory business, told analysts during an earnings call that the supply shortage is expected to intensify in 2027 compared with this year and is likely to persist into 2028.
Also read: Apple will rely entirely on Samsung for OLED MacBook screens, says report
Samsung revealed they had secured long-term supply agreements with the world’s five largest data centre companies and are close to finalising similar deals with five other major firms. However, the names of the companies which secured the long-term deal still remain under wraps.
According to reports, the contracts will run for at least five years and cover about 60 to 70 per cent of Samsung’s future production capacity. The agreements also include advance payments and fixed minimum prices, helping the company plan investments with greater confidence.
Also read: Microsoft earnings surprise: Azure outperforms, Copilot adoption hits new record
Samsung recently unveiled strong pre-order numbers for its latest smartphones, the Samsung Galaxy Z Fold 8, Galaxy Z Fold 8 Ultra, and Galaxy Z Flip 8. However, despite the strong demand, the bigger picture is less encouraging. The company reported a quarterly loss in its mobile business, as rising chip costs weighed on profitability.
On the other hand, the DS division (memory division) at Samsung earned 89.2 trillion won in Q2 2026 operating profit compared to 53.7 trillion won in Q1 2026. This was an impressive rise by 66 per cent quarter-over-quarter, which was a record high. High memory chip costs and the need for AI have been crucial in bringing about this situation.