Samsung Electronics expects the global semiconductor shortage to persist through 2028, as the South Korean technology giant moves to secure long-term supply agreements with major data centre operators amid sustained demand for artificial intelligence (AI) infrastructure.
The world’s largest memory chipmaker said it expects supply constraints to worsen in 2027 before continuing into 2028, even as it posted a more than 250-fold jump in second-quarter operating profit from its semiconductor business.
“The supply shortage in 2027 is expected to worsen compared to this year, and it is expected to continue in 2028,” said Jaejune Kim, executive vice president of Samsung’s memory business.
Samsung said it has signed supply agreements lasting at least five years with the world’s five largest data centre companies and is close to securing similar deals with another five major customers. The contracts, which include upfront payments and floor pricing, are expected to account for between 60% and 70% of the company’s long-term production capacity.
The strong outlook helped ease investor concerns over whether heavy AI spending by major technology firms would continue. Samsung’s shares rose as much as 8% before trimming gains to trade 1.1% lower.
The semiconductor division reported operating profit of 89.2 trillion won (US$61.7 billion) for the April to June quarter, while overall operating profit reached 89.5 trillion won, in line with the company’s earlier guidance and sharply higher than 4.68 trillion won a year ago. Quarterly revenue surged 130% to 171.5 trillion won.
Samsung said revenue from its latest high bandwidth memory (HBM4) chips is expected to more than triple in the third quarter, helping the company narrow the gap with rival SK Hynix in the fast-growing AI memory market.
However, higher memory chip prices weighed on Samsung’s mobile business, which posted its first quarterly loss of 700 billion won.
The company also said its foundry business is expected to recover in the near future as factory utilisation and chip prices improve. It remains on track to begin operations at its Taylor, Texas fabrication plant later this year and plans to start construction of a second facility, which is expected to begin mass production in 2030.
Samsung chief financial officer Park Soon-cheol said the company has no plans to issue American depositary receipts, adding that its diversified business continues to generate sufficient cash to fund future growth.
Reuters
