Samsung Electronics, a leading memory manufacturer, has issued a stark warning about a looming memory supply crisis, predicting that shortages will intensify through 2026 and persist into 2028. The company reported a significant surge in revenue and operating profit for the second quarter of 2026, with revenues reaching approximately $119 billion and operating profit hitting $62 billion.
Despite this financial success, fueled in part by demand from AI data centers, Samsung's head of investor relations, Daniel Oh, stated during the latest earnings call that supply constraints are expected to become "even more severe in 2027 than 2026." This outlook suggests the current supply shortage will continue beyond the coming year, with visibility beyond 2029 remaining limited. "Beyond 2029, it is hard to say because of more limited visibility," Oh noted.
To secure necessary capacity, customers are actively seeking multi-year supply agreements. Samsung anticipates that significant incremental supply increases are unlikely before 2028, making such long-term commitments a strategic move for both parties. These agreements help Samsung by guaranteeing sales for an estimated 60-70% of its total production capacity, while customers ensure a more stable supply chain.
Samsung also indicated that unmet demand from 2026 is likely to carry over into 2027, further exacerbating the supply problems. The company is open to these multi-year arrangements as a method to hedge against mid- to long-term risks.
This situation has impacted other major memory manufacturers as well. SK Hynix, another key player, recently announced quarterly earnings of $55.6 billion, which fell short of analyst expectations of $58 billion, partly attributed to slower HBM4 shipments. While both Samsung and SK Hynix are reporting record profits, the ongoing memory crisis is creating constraints across various hardware sectors, with memory makers and AI creators seen as the primary beneficiaries and, arguably, contributors to the current market conditions.