Samsung Electronics expects the global semiconductor shortage to continue until at least 2028, saying demand from artificial intelligence (AI) data centres is expected to outpace supply for years.
The South Korean technology giant said it has signed multi-year memory chip supply agreements with the world's five largest data centre operators and is close to finalizing similar contracts with five more.
The agreements, which typically run for at least five years, include upfront payments and minimum pricing provisions designed to reduce volatility in the memory chip market.
"Almost all customers are requesting multi-year supply contracts," Samsung Executive Vice President Jaejune Kim said during the company's earnings call.
Samsung said it aims to secure long-term agreements covering roughly two-thirds of its memory chip production.
The company reported a more than 250-fold increase in semiconductor operating profit to 89.2 trillion won ($61.7 billion) in the second quarter, driven by strong demand for AI-related memory chips and higher chip prices.
Group revenue rose 130% year-on-year to 171.5 trillion won, while overall operating profit reached 89.5 trillion won, broadly in line with the company's earlier guidance.
Despite record earnings in its semiconductor business, Samsung's mobile division posted its first quarterly loss, reporting a 700 billion won deficit as rising memory chip prices increased manufacturing costs.
The company expects demand for high-bandwidth memory (HBM) chips used in AI processors to remain robust, forecasting HBM4 revenue will more than triple in the third quarter.
Samsung also said its foundry business is expected to return to profitability as factory utilisation improves and chip prices remain elevated. The company reaffirmed plans to begin operations at its semiconductor plant in Taylor, Texas, later this year.
Samsung shares briefly climbed more than 8% after the earnings announcement but closed 0.7% lower, as investors weighed concerns over rising AI infrastructure spending and the sustainability of current profit margins.
.jpg)
