Samsung warns global memory crunch will deepen in 2027 and persist through 2028

Samsung Electronics has cautioned that the ongoing semiconductor memory shortage will intensify dramatically in 2027 and extend until at least 2028.

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Speaking during the company’s Q2 earnings conference, Jaejune Kim, Executive Vice President of Samsung’s memory business, revealed that surging demand from artificial intelligence infrastructure is vastly outstripping the semiconductor industry's physical manufacturing capacity. Unmet demand from 2026 is already rolling into next year, compounding supply deficits as tech giants race to secure high-performance memory chips.

The AI Infrastructure Squeeze

The global bottleneck, increasingly referred to across the hardware industry as "RAMaggeddon," is largely fueled by hyper-scalers building out enterprise AI data centers. To support massive artificial intelligence model inference and training, memory manufacturers have pivoted substantial production capacity toward specialized High-Bandwidth Memory (HBM) modules for AI accelerators from leaders like Nvidia and AMD.

This shift has severely constrained the supply of standard Dynamic Random-Access Memory (DRAM) and NAND flash used in everyday consumer and enterprise computing. Compounding the crisis, Samsung executives noted that establishing new semiconductor fabrication facilities requires at least 3.5 years from groundbreaking to commercial wafer production, preventing any rapid supply expansion before 2028.

Locking Up 70% of Capacity in Multi-Year Deals

In response to prolonged scarcity, Samsung is fundamentally altering its commercial strategy. The world's largest memory supplier is shifting 60% to 70% of its total output into binding, multi-year supply contracts. Samsung confirmed it has finalized minimum five-year agreements with the top five global data center operators and is near completion on deals with five additional major cloud providers.

These long-term contracts include upfront capital deposits and guaranteed price floors, shielding chipmakers from future market volatility while guaranteeing enterprise clients priority allocation over consumer markets.

Spiking Consumer Hardware Costs

While soaring memory prices propelled Samsung’s semiconductor division to record quarterly profits, the price surge is severely undercutting consumer electronics manufacturers. Higher component input costs drove Samsung’s own mobile communications unit into a quarterly loss, while competitors like Apple have already begun raising retail prices on MacBooks, iPads, and smartphones to offset memory inflation.

With the crunch expected to peak over the next two years, analysts warn that high hardware prices across PCs, smartphones, and storage devices will remain a persistent headwind for global consumers through the end of the decade.