Samsung Electronics expects the global chip shortage to intensify in 2027 and persist through 2028, with surging demand from artificial intelligence applications and data centres driving the supply pressure.

The outlook came alongside a sharp jump in Samsung’s chip earnings, highlighting how tight supply is supporting memory chip prices.

Samsung’s semiconductor division reported an operating profit of 89.2 trillion won ($61.7 billion) in the second quarter, more than 250 times higher than a year earlier. Overall revenue increased 130% to 171.5 trillion won, showing how strongly the current AI-led chip cycle is benefiting the business.

To protect itself from future swings in the chip market, Samsung is also signing longer-term supply agreements. The company has deals with the five biggest global data centre companies and is in talks with five more. These contracts will run for at least five years and are expected to cover around 60% to 70% of Samsung’s memory capacity over the longer term.

The company’s strong chip performance is closely linked to the rapid expansion of AI infrastructure. Samsung expects revenue from its next-generation HBM4 memory chips to more than triple in the third quarter. It is also working to strengthen its position against SK Hynix in the high-bandwidth memory market used in AI processors.

However, the chip boom is creating challenges elsewhere. Higher memory prices have increased costs for Samsung’s smartphone business, which reported a 700 billion won loss in the second quarter. This shows that a prolonged shortage could benefit chipmakers while putting pressure on businesses that rely heavily on memory components.

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