Samsung Chip Shortage Projected Through 2028 as Shares Surge 8%

Samsung Electronics expects global memory chip shortages to worsen and extend into 2028, according to company executives, even as surging semiconductor prices drive massive profit growth while simultaneously squeezing the firm’s mobile division. The memory giant posted an operating profit of 89.2 trillion won ($61.7 billion) for the second quarter, marking a more than 250-fold jump from a year earlier, according to company financial disclosures.

Long-Term Supply Contracts and AI Infrastructure Demand

Samsung has locked in long-term supply agreements with five major global data center firms and is nearing deals with five additional large companies, according to Jaejune Kim, executive vice president of Samsung’s memory business. Speaking on an earnings call with analysts, Kim stated that the supply shortage is expected to worsen in 2027 compared to the current year and continue into 2028. These long-term contracts will span at least five years and cover 60% to 70% of Samsung’s total capacity for the longer term. The agreements include upfront payments and floor pricing designed to hedge risks associated with capital investments, as reported by Reuters.

Management’s commentary on the conference call was better than expected and provided significant reassurance to the market, according to Ryu Young-ho, a senior analyst at NH Investment & Securities. These developments arrive following a sharp slide in recent months where chip stocks lost momentum amid investor concerns regarding funding for the artificial intelligence infrastructure buildout and growing competition from China that could put earnings under pressure.

Diverging Fortunes: Semiconductor Boom Versus Mobile Division Loss

While soaring semiconductor prices bolstered the company’s chip division, they simultaneously damaged Samsung’s mobile business. The mobile division reported a 700 billion won loss, marking its first quarter in the red, according to company figures. Analysts point out that the financial dynamics creating immense wealth on one side of the conglomerate are simultaneously penalizing the other. Josh Gilbert, an analyst at eToro, noted that the chips enriching one side of Samsung are now hurting the other, leaving the group more exposed than ever to memory pricing trends and the durability of hyperscaler demand.

Overall, Samsung reported a total operating profit of 89.5 trillion won ($61.98 billion) for the April-to-June period, aligning closely with its earlier estimate of 89.4 trillion won and surging past the 4.68 trillion won reported a year earlier. Total revenue for the quarter climbed 130% to reach 171.5 trillion won. Following the earnings release and supply chain disclosures, shares in the world’s top memory chipmaker surged as much as 8% on the stock exchange.

Industry Context and Competitor Positioning

In the second half of 2026, Samsung’s memory business anticipates robust demand centered on servers driven by continued artificial intelligence infrastructure capital expenditures and the broader adoption of agentic AI, according to a corporate statement. This dynamic is projected to keep the market undersupplied despite partial demand moderation in mobile devices and personal computers.

Cross-town rival SK Hynix reported bumper quarterly results that fell slightly short of lofty investor expectations, alongside plans to raise capital spending this year by approximately 50% to satisfy surging AI demand, according to Reuters reporting. Meanwhile, Samsung outlined a specific plan to turn around its loss-making foundry business in the near future.

Frequently Asked Questions

How long does Samsung expect memory chip shortages to last?

Samsung expects global memory chip shortages to worsen through 2027 and extend into 2028, according to Jaejune Kim, executive vice president of Samsung’s memory business.

How did surging chip prices impact Samsung’s mobile division?

While the semiconductor division posted massive profits, soaring memory prices drove Samsung’s mobile division to a 700 billion won loss, marking its first quarter in the red.

What measures is Samsung taking to secure chip supply agreements?

Samsung has signed long-term supply agreements spanning at least five years with five major global data center firms, accounting for 60% to 70% of its longer-term capacity, complete with upfront payments and floor pricing.