Samsung sees AI memory demand outstripping supply, raising cost concerns

Samsung Electronics said AI infrastructure spending could reach a historic level in 2027, with demand for memory chips expected to outstrip industry supply by a wider margin

Samsung Electronics has warned that demand for AI memory chips will far outstrip supply in 2027, potentially adding to cost pressures for smartphone makers and other consumer electronics companies.

 

In its third-quarter earnings release on Thursday, the South Korean electronics major said investment in AI infrastructure was expected to reach a historic high next year as the AI ecosystem expands. The company expects AI-driven demand to widen the gap between memory chip demand and supply compared with 2026.

 

Samsung reported record consolidated revenue of approximately $146.2 billion (195.3 trillion won) and operating profit of approximately $79.8 billion (107.4 trillion won) for the quarter ended September 30, 2026. Revenue rose 14 per cent sequentially.

 

 

The company said, the gains were driven primarily by its semiconductor business, which benefited from strong demand for memory chips used in AI servers and data centres.

 

Samsung said its mobile and networks businesses recorded an operating loss of 0.6 trillion won in the September quarter, with earnings declining year-on-year because of cost pressures, despite higher revenue.

 

The company did not announce any consumer price increases. However, sustained increases in component costs could put pressure on manufacturers' margins and influence pricing decisions across the electronics industry.

 

Samsung's mobile business plans to focus on premium smartphones and differentiated product features in 2027, the company said in the release.

 

Memory supply remains the central constraint

 

Samsung's Device Solutions division, which houses its semiconductor operations, reported revenue of approximately $110.2 billion (147.1 trillion won) and operating profit of approximately $79.8 billion (106.5 trillion won) in the third quarter. Its memory business recorded an all-time high in quarterly revenue and operating profit, supported by strong server demand, capacity constraints and higher market prices across applications.

 

"The DS Division once again set an all-time quarterly record by expanding high-bandwidth memory (HBM4) sales in memory and actively responding to server demand," the company said.

 

The company plans to prioritise HBM, server dynamic random-access memory (DRAM) and solid-state drives (SSDs), while increasing supplies of high-speed server memory and other products used in AI infrastructure.

 

Samsung also expects demand for high-capacity SSDs to rise as personal AI agent services expand. It plans to secure multi-year contracts and align new product launches with customers' requirements.

 

Samsung expects 2026 capital expenditure to reach about $63.2 billion (84.4 trillion won), including $57.5 billion (76.8 trillion won) for its semiconductor division. Samsung said investment would focus on new fabrication facilities and infrastructure to meet strong demand for AI and high-performance computing.