Samsung forecasts chip shortage extending to 2028 as memory prices surge

Samsung Electronics reports a 250-fold surge in Q2 2026 chip profits to 89.2 trillion won, driven by AI demand, while forecasting global chip shortages extending to 2028. To mitigate volatility, Samsung is securing five-year supply deals with major data centers. However, surging chip prices triggered a 700 billion won loss in its mobile division, and broader investor anxiety over tech giants' heavy AI infrastructure spending caused Samsung stock to end down 0.7% despite early gains.

Samsung Q2 chip profit surge

• ▪Samsung Electronics reported a semiconductor unit operating profit of 89.2 trillion won ($61.7 billion) in the second quarter of 2026, representing a more than 250-fold increase from the previous year
• ▪Samsung Electronics' overall revenue rose 130% to 171.5 trillion won in the second quarter of 2026, with overall operating profit rising to 89.5 trillion won

Chip shortage extending to 2028

• ▪Samsung Electronics forecasts that global chip shortages will become more acute and extend into 2028
• ▪Samsung Electronics expects its foundry business to turn around in the near future, driven by rising factory utilization rates and chip prices

Multi-year data center supply contracts

• ▪Samsung Electronics' multi-year supply contracts will last at least five years and typically include upfront payments and floor pricing to hedge capital investment risks
• ▪Samsung Electronics aims to secure multi-year contracts covering approximately two-thirds of its memory output over the longer term to reduce exposure to boom-and-bust cycles
• ▪Samsung Electronics has signed multi-year supply agreements with five of the biggest global data center firms and is nearing deals with five other major players

Mobile division quarterly loss

• ▪Samsung Electronics' mobile division reported a 700 billion won loss in the second quarter of 2026, marking its first quarter in the red due to surging chip prices
• ▪Market analysts indicate that surging memory chip prices have left Samsung Electronics highly exposed to memory pricing volatility and the durability of hyperscaler demand

AI infrastructure spending concerns

• ▪Meta Platforms reported a 91% drop in second-quarter free cash flow, and Alphabet reported its first cash-flow-negative quarter, fueling investor worries about tech firms' AI infrastructure expenditures
• ▪Samsung Electronics' stock ended down 0.7% on July 30, 2026, after rising as much as 8.4%, amid investor concerns regarding the sustainability of high margins and heavy AI infrastructure spending

HBM market share gains

• ▪Samsung Electronics expects its high bandwidth memory 4 (HBM4) revenue to more than triple in the third quarter of 2026
• ▪Samsung Electronics aims to bring its high bandwidth memory market share in line with its dynamic random access memory (DRAM) market share in the second half of 2026