Samsung Sees Chip Shortage Lasting Until 2028 as Semiconductor Profits Surge
Samsung Electronics expects the global memory chip supply shortage to continue until 2028, as strong demand for advanced semiconductors and artificial intelligence infrastructure keeps supply under pressure.
The South Korean technology giant said it has secured long-term supply agreements with customers to help meet growing demand while ensuring stable deliveries over the coming years.
Chip Business Drives Record Profit
Samsung's semiconductor division remained the company's strongest performer during the quarter.
Operating profit from its chip business reached 8.9 trillion won, representing an increase of more than 250-fold compared with the same period a year earlier. Rising prices for DRAM and NAND memory chips, fueled by demand from AI servers and data centers, significantly boosted earnings.
The company said the favorable pricing environment is expected to continue as supply remains constrained.
Mobile Division Posts First Loss
While the semiconductor business delivered exceptional growth, Samsung's mobile division reported a loss for the first time, reflecting weaker smartphone demand and higher component costs.
The increase in memory chip prices, which benefits Samsung's semiconductor operations, has also raised production costs for its smartphone business, putting pressure on margins.
Despite the setback, Samsung expects its mobile business to improve as new product launches and premium device sales gain momentum.
Long-Term Supply Deals Support Outlook
To strengthen its market position, Samsung has signed long-term agreements with major customers, providing greater visibility into future demand.
The company believes sustained investment in artificial intelligence, cloud computing, and advanced data centers will continue to drive robust demand for high-performance memory chips over the next several years.
Shares Rally on Strong Results
Investors welcomed Samsung's outlook, sending the company's shares up as much as 8% following the earnings announcement.
The strong performance of its semiconductor division helped offset concerns surrounding the mobile business and reinforced confidence in Samsung's long-term growth strategy.