SAN FRANCISCO — Samsung Electronics anticipates a worsening global memory chip shortage through 2027, with tight supply conditions projected to persist until at least 2028. The multi-year forecast emerged from the company's Q2 earnings call, driven by sustained demand from artificial intelligence data centers.
The prolonged supply constraint is pushing up component costs across the technology industry, directly hitting manufacturers of enterprise hardware and consumer devices and raising retail prices for products that rely on advanced memory chips.
Samsung produces roughly one-third of the world's dynamic random-access memory (DRAM) and NAND flash, giving its forecasts outsized influence over the entire tech supply chain.
The primary demand driver is frontier AI laboratories, which are engaging Samsung directly to lock in future memory access for model training and inference operations. Those customers are providing Samsung with medium- to long-term demand forecasts, giving the chipmaker production-cycle visibility that is rare in this industry.
Samsung now prioritizes customers willing to sign long-term supply agreements, a shift that provides stable, multi-year revenue visibility and supports capital expenditure in new fabrication facilities. The strategy aims to insulate Samsung from the memory industry's cyclical boom-and-bust pattern of oversupply and sharp price declines.
Other major memory producers report similarly strong demand. SK Hynix, a key competitor in high-bandwidth memory (HBM), has said its HBM production is sold out through the end of 2025.
Nvidia, the dominant AI GPU supplier, depends on consistent access to advanced memory to power its server racks. Nvidia shares traded at $200.75, up 2.9 percent. Microsoft, Alphabet and Amazon are also heavily affected as they expand AI infrastructure requiring vast quantities of memory. Microsoft shares traded at $464.72, up 3.0 percent. Alphabet gained 6.7 percent to $356.13; Amazon rose 15.3 percent to $271.58.
Despite strong demand and the strategic shift toward long-term contracts, investors remain cautious on memory manufacturers. Samsung trades at 8.2 times forward earnings, a 30 percent discount to its five-year average. SK Hynix trades at 6.8 times forward earnings—valuations that reflect market skepticism about the durability of current AI spending levels.
