Samsung warns chip shortages will persist until at least 2028 as AI demand devours memory supply

Samsung Electronics just delivered one of the starkest warnings yet about the global semiconductor supply crunch. During its Q2 2026 earnings call on July 30, Executive Vice President Jaejune Kim told investors that memory chip shortages will intensify through 2027 and won’t ease until at least 2028.

A tale of two divisions

Samsung’s quarterly numbers tell a story of an industry being reshaped in real time. The company’s semiconductor operating profit hit 89.2 trillion won, roughly $61.7 billion, in the second quarter. That figure represents a more-than-250-fold increase compared to the same period a year earlier.

Samsung’s overall group operating profit reached 89.5 trillion won, meaning its chip business accounted for nearly all of it. The company has locked in multi-year supply agreements with the five largest global data center operators, contracts that now cover approximately two-thirds of Samsung’s total memory output.

Samsung’s mobile division posted a loss of 700 billion won, its first quarterly deficit ever. The reason is almost painfully ironic: Samsung’s own memory chips have become so expensive that they’re driving up the cost of Galaxy devices, which in turn is cooling consumer demand for those phones.

Why this shortage is different

The constraint isn’t logistics. It’s physics and capital expenditure timelines. Building new fabrication capacity for high-bandwidth memory (HBM) chips, the specific type of memory that AI accelerators like Nvidia’s GPUs require, takes years and costs billions. Samsung and its rivals SK Hynix and Micron are all expanding production, but new fabs don’t materialize overnight.

HBM chips stack multiple layers of DRAM vertically to deliver the bandwidth that AI workloads need, and manufacturing them is significantly more complex than producing standard memory modules. The result is a market where AI-grade memory commands premium pricing, pulling manufacturing capacity away from the consumer electronics sector.

Market reaction and what comes next

Wall Street’s response to Samsung’s earnings was characteristically confused. Shares surged as much as 8.4% intraday after the report dropped. By the close, the stock had given back all of those gains and then some, finishing the session down 0.7%.

Samsung’s two-thirds output commitment to long-term data center contracts raises an interesting question about flexibility. Locking in guaranteed revenue is smart risk management. But if AI spending were to decelerate, Samsung would have less room to redirect supply toward other markets.

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