Samsung Electronics shares jumped 8% on Thursday after the South Korean technology giant said strong artificial intelligence chip demand could worsen global memory chip shortages in 2027 and keep the market undersupplied into 2028. The outlook came alongside a sharp turnaround in Samsung’s semiconductor business, although higher memory prices pushed its mobile division into a quarterly loss.
Samsung Warns AI Chip Shortage Could Worsen
Samsung said demand for memory chips used in AI infrastructure remains strong, countering concerns that heavy spending by major technology companies on AI infrastructure could eventually slow.
Jaejune Kim, executive vice president of Samsung’s memory business, told analysts that supply shortages are expected to become more severe next year and could continue into 2028.
“The supply shortage in 2027 is expected to worsen compared to this year, and it is expected to continue in 2028.”
Samsung said demand that cannot be fulfilled in 2026 is being pushed into the following year because of tight supply, potentially adding further pressure to the memory market.
AI Infrastructure Keeps Memory Demand Strong
Samsung expects robust demand in the second half of 2026, particularly from servers, as companies continue investing in AI infrastructure and adopt agentic AI systems.
The company said these trends are expected to keep the memory market undersupplied even as demand from mobile devices and personal computers moderates partially.
“In H2 2026, the Memory Business expects robust demand centered on servers stemming from continued AI infrastructure capex and broader adoption of agentic AI.”
The outlook comes after a sharp sell-off in semiconductor stocks in recent months. Investors have been concerned about the ability of major technology companies to fund the enormous infrastructure spending required for AI, as well as growing competition from Chinese chipmakers.
Samsung Semiconductor Profit Jumps
Samsung’s semiconductor division recorded an operating profit of 89.2 trillion won ($61.7 billion) in the second quarter, according to the Reuters report, representing an increase of more than 250 times from the same period a year earlier.
Samsung’s overall operating profit for the April-June quarter was reported at 89.5 trillion won ($61.98 billion), compared with 4.68 trillion won a year earlier. Revenue rose 130% year-on-year to 171.5 trillion won.
The figures underline the sharp improvement in Samsung’s chip business as memory prices benefit from strong AI-related demand.
Higher Chip Prices Hurt Samsung’s Mobile Business
The memory boom has also created a problem elsewhere inside Samsung. The company’s mobile division posted a loss of 700 billion won during the quarter, its first quarterly loss.
Josh Gilbert, an analyst at eToro, said the contrasting results show how higher memory prices can benefit Samsung’s semiconductor business while increasing costs for its device operations.
Samsung is also attempting to close the gap with rival SK Hynix in supplying high-bandwidth memory, or HBM, chips used in AI processors.
Samsung Shares Rebound, SK Hynix Also Rises
Samsung shares gained 8% in early trading following the earnings call, while SK Hynix shares rebounded 3%.
The gains followed a difficult period for semiconductor stocks. Samsung and SK Hynix had both suffered significant declines amid concerns about the sustainability of AI infrastructure spending and increasing competition from China.
SK Hynix reported strong quarterly results on Wednesday but fell short of high investor expectations. The company has also indicated plans to increase capital spending this year by around 50% to meet rising AI-related demand.
AI Boom Reshapes Global Memory Chip Market
Samsung’s latest outlook highlights the continuing impact of AI infrastructure investment on the global memory chip market. Strong demand for AI processors and related server technology is supporting memory prices, while chipmakers face pressure to expand supply.
For Samsung, the AI boom is therefore producing both gains and challenges: its semiconductor business is benefiting from tight memory supply, while higher chip costs are weighing on its mobile operations.
Source: Reuters
