The world’s largest semiconductor maker is reaping the rewards of a global memory chip shortage driven by AI demand that’s so brutal it’s making everyone miserable.
Samsung said in its latest earnings report that it saw a record profit, up nearly 500% from the same period last year, to $31.72 billion. This figure was boosted by a 50-fold increase in profits from its chip business.
The company has sold off all of its memory production capacity until the end of the year and says it is in short supply, which is driving up prices for everything from. laptops to smartphones to external storage devices to game consolesit will be worse in 2027. That, most likely, will continue to increase the prices of technical devices and begin to affect the purchasing behavior of millions of consumers.
In an investor call for an earnings report, one of the company’s memory chip managers, Kim Jaejune, said, “Based on the current demand for 2027, the supply gap in 2027 will be larger than in 2026.”
Long-term memory loss
Memory prices started to rise dramatically last year as upgrade to data centers Companies that support AI have acquired large amounts of memory used to power the hardware that processes all of their data. That, in turn, has led to global shortages and rising prices that – according to Samsung — won’t be slowing down anytime soon.
Samsung is trying to keep up with the demand of companies, including Nvidia, as it competes with those same companies, which also produce their own semiconductors. Apple, Microsoft and Alphabet are among the world’s leading memory makers, but they are also Samsung’s customers and cannot produce the amount of memory needed to meet their growing needs themselves.
The company’s chip executives’ claims about long-term memory shortages are consistent with what analysts, other companies and chip manufacturing capacity data are saying, said Quandary Peak Research vice president and former Samsung executive Mahdi Eslamimehr.
“The capacity of the new fabric is still many years away, and the existing lines are being transferred to HBM (high bandwidth memory) and business DDR5, which systematically compresses the supply,” said Eslamimehr.
Samsung’s earnings, he added, “reflect a true AI-driven cycle rather than a passing spike.”
To make matters worse, he said, Samsung has binding, multi-year contracts with some of its customers that help protect revenue, but also leave very little flexibility for non-AI memory production.
Grab that upgrade…
Meanwhile, for people buying tech products, phones and PCs will continue to cost more with no apparent relief. 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 if price-sensitive technology.
“While Samsung and its AI customers thrive, everyday consumers will pay more for phones, laptops, SSDs and gaming hardware, with more pain in the budget and midrange components that deliver capacity,” Eslamimehr said.
