Samsung says memory chip shortages will worsen through 2028

Samsung Electronics and SK Hynix ↘ 3.12% have secured major long-term memory chip supply agreements with leading U.S. technology companies, deals announced during South Korean President Lee Jae Myung's AI Summit in San Francisco on July 25. The agreements, which cover high-bandwidth memory critical for AI data centers, mark a new era of multi-year strategic contracts in the semiconductor industry.

Five-Year Contracts Reshape Memory Market

Samsung executive vice president Jaejune Kim said during the company's Q2 2026 earnings call that the chipmaker has signed five-year supply agreements with the world's five largest data center operators, covering 60% to 70% of its memory capacity. Kim said memory shortages in 2027 could be worse than this year and would continue into 2028.inavateonthenet

According to Seoul Economic Daily, Samsung has secured the most favorable long-term agreement terms among the three major memory chipmakers. Bank of America noted that Samsung's contracts cap price cuts at a maximum of 5% per quarter while imposing virtually no ceiling on price increases. SK Hynix has adopted a more flexible pricing structure, while Micron ↘ 2.22% set both price floors and ceilings in its agreements.sedaily

Samsung plans to operate only 60% to 70% of its total capacity through these long-term agreements, keeping the remaining 30% flexible to capitalize on market conditions. The company has also secured approximately a quarter of total contract values as advance payments.sedaily

Samsung-Broadcom Partnership Worth Over $200 Billion

Separately, Samsung and Broadcom ↘ 2.62% signed a memorandum of understanding at the AI Summit to expand their strategic collaboration across memory and foundry technologies, with the partnership estimated at more than $200 billion over five years through 2030. The deal covers high-bandwidth memory supply for Broadcom's next-generation AI accelerators and Samsung's 2-nanometer foundry processes for Broadcom's networking and wireless products.news.samsung

"AI is driving unprecedented demand for tightly integrated semiconductor technologies spanning memory, logic and advanced packaging," said Young Hyun Jun, vice chairman and CEO of Samsung's device solutions division.storagenewsletter

Record Earnings Amid Shortage Concerns

Samsung reported record Q2 2026 results, with revenue rising 28% quarter-over-quarter to 171.5 trillion won and operating profit climbing 56% to 89.5 trillion won. Analysts project Samsung's full-year 2026 operating profit at 391 trillion won.investing+1

The deals were announced during President Lee's visit to San Francisco, where he hosted an AI summit attended by Nvidia ↘ 1.47% CEO Jensen Huang, OpenAI CEO Sam Altman, and executives from both Samsung and SK Hynix. Samsung, SK Hynix, and Micron face a lawsuit in California alleging cartel-like behavior and price fixing amid the memory shortage.eurogamer+2