Memory chip supply shortage expected to persist until 2028

Samsung, which produces and supplies approximately one-third of the world’s memory chips, predicts that the memory chip supply shortage triggered by artificial intelligence development will worsen in 2027 and continue until 2028.

According to a TechCrunch report on Friday (31/7), during its second-quarter 2026 financial performance presentation, Samsung stated that leading AI laboratories, eager to secure access to memory infrastructure, have shared their medium-to-long-term demand forecasts with the company to secure future supplies. This high demand allows Samsung to prioritise customers willing to sign long-term memory chip supply contracts. Such certainty in demand over the coming years enables the company to install equipment and increase production without the fear of declining demand, helping to avoid the cyclical fluctuations typically seen in the memory industry.

This situation is having varying impacts across Samsung’s business divisions. The revenue of the South Korean company’s semiconductor division reached record highs in the second quarter, but profits in its smartphone and television businesses declined due to rising component costs. Samsung has begun passing some of these increased component costs on to consumers by raising the prices of its Galaxy smartphones and tablets, though this move has led to a decrease in demand for these devices.

In its latest financial report, Apple projected its revenue growth for the following quarter to be only in the range of 9 to 11 per cent year-on-year, lower than the approximately 16 per cent growth seen in recent quarters. The prices of consumer electronic devices are expected to rise if memory manufacturers divert a large portion of their production capacity to meet the needs of AI data centres. For instance, Nvidia is expected to increase the prices of its consumer graphics cards by 20 to 30 per cent, which could lead to price hikes for desktop computers, laptops, gaming consoles, and other gaming hardware.