Samsung Electronics is sounding the alarm about a deepening global memory chip shortage. On Thursday, the company said it expects supply to get even tighter by 2027—and not let up in 2028. The reason? AI companies and data center operators keep demanding more memory chips than the industry can produce.
Now, more AI firms are bypassing the usual channels and going straight to Samsung to lock in chips with multi-year deals. The shortage is making customers nervous enough that they’re racing to secure capacity years in advance. Samsung’s response? They’re expanding long-term contracts to give clients peace of mind (and to make sure they have a steady pipeline of orders that justifies investing in new factories).
Jaejune Kim, who runs Samsung’s memory business, didn’t sugarcoat it on their latest earnings call. He said the 2027 shortage will be tougher than what we’re seeing now—and things probably won’t ease up the next year either.
Why so bleak? It’s just not easy—or quick—to build new chip factories. Samsung pointed out that it takes more than three and a half years from breaking ground on a new fab to actually producing wafers. So no, you can’t just flip a switch and add more supply.
Samsung’s been busy signing long-term deals with the world’s biggest data center companies. Five contracts are already in place, and five more are nearly done. Each agreement runs at least five years and covers the majority of Samsung’s available long-term memory capacity—about 60% to 70%, according to the company. They involve upfront payments and minimum pricing, too, which helps Samsung pour money into new plants without stressing over sudden price drops.
The growing demand for AI infrastructure is driving a broader chip industry boom. Memory chips, high-bandwidth memory, and foundry capacity are all being stretched thin. Samsung’s latest comments seem to reassure investors, many of whom were worried the AI frenzy might burn out. The company just posted a staggering 250-fold jump in chip profits, thanks to better prices and strong orders.
It’s not just memory. Samsung’s foundry business also made headlines recently with a multibillion-dollar deal with Broadcom—a move that highlights their push to grab more business in advanced logic chips while every competitor scrambles to boost AI chip production.
Bottom line: The chip shortage isn’t going away soon, especially for the kind of high-performance memory that powers AI servers and massive data centers. Samsung looks determined to lock in big customers and steady revenue before the next round of capacity crunch hits.
So, why should you care? Samsung is a heavyweight in the memory chip world, so what happens here shapes the entire AI industry. If shortages keep dragging on, prices could stay high, delaying server builds and sparking even fiercer competition among cloud and AI companies for the chips they need.
It also signals a shift in how chips get bought and sold. Samsung is moving toward multi-year, upfront-commitment deals—instead of everyone fighting over whatever’s left on the open market. The AI boom isn’t just changing what gets built. It’s changing how business gets done.
