Samsung and SK Hynix Warn AI-Driven Memory Shortages Will Persist Until 2027

The global semiconductor industry faces a prolonged period of memory chip shortages that could extend into 2027, according to top executives at Samsung Electronics and SK Hynix, as artificial intelligence applications continue to drive unprecedented demand for high-bandwidth memory solutions.

During their recent earnings calls, both companies painted a picture of sustained supply constraints despite significant capacity expansions. SK Hynix, which recently surpassed Samsung in annual operating profit for the first time in its history, reported record profits of approximately $33 billion in 2025, while Samsung posted around $30.5 billion during the same period.

The AI Memory Boom

The shortage stems from the explosive growth in AI computing infrastructure, particularly high-bandwidth memory (HBM) chips that are essential for training large language models and running complex AI workloads. SK Hynix's California-based subsidiary Solidigm is being restructured into a new "AI Company" with at least $10 billion in committed investment, signaling the strategic importance of this market segment.

Samsung's Dylan Butts reported that the company's fourth-quarter revenue reached approximately $65.6 billion, up 24% year-over-year, with operating profit surging over 200% to around $14.06 billion. The gains were primarily driven by memory chip price hikes and strong HBM demand, though the company acknowledged that supply constraints would likely persist for at least two more years.

Market Dynamics

SK Hynix's ability to capitalize on the AI memory boom has been particularly impressive. The company's focus on cutting-edge HBM technology has allowed it to command premium pricing and secure key partnerships with major AI hardware manufacturers. This strategic positioning has enabled SK Hynix to leapfrog its larger rival in profitability, despite Samsung's broader product portfolio and greater scale.

The memory shortage has ripple effects across the entire technology ecosystem. AI chipmakers like Nvidia, which is reportedly in talks to invest up to $30 billion in OpenAI as part of a $100 billion funding round, depend on a stable supply of high-performance memory to meet surging demand for their AI accelerators.

Production Challenges

Both companies face significant challenges in scaling production to meet demand. Memory chip manufacturing requires massive capital investment, specialized cleanroom facilities, and complex supply chains for raw materials and manufacturing equipment. The lead time for new fabrication facilities can extend several years, meaning that even aggressive expansion plans won't alleviate shortages in the near term.

SK Hynix's restructuring of Solidigm into a dedicated AI entity reflects the company's recognition that specialized focus and investment are required to maintain its competitive edge in this critical market segment. The $10 billion commitment underscores the scale of investment needed to address the ongoing supply constraints.

Industry Impact

The prolonged memory shortage has implications beyond just pricing and availability. Companies developing AI applications may face delays or increased costs as they compete for limited memory resources. This could potentially slow the pace of AI innovation or force companies to optimize their models for more efficient memory usage.

Meanwhile, the memory shortage has contributed to the broader semiconductor industry's capital expenditure boom. Microsoft recently reported capital expenditures of $37.5 billion in its most recent quarter, up 66% year-over-year, with much of this investment directed toward AI infrastructure that requires substantial memory capacity.

Looking Ahead

Industry analysts suggest that the memory shortage could persist until new fabrication facilities come online and production capacity expands sufficiently to meet AI-driven demand. Given the multi-year timelines for semiconductor manufacturing expansion, 2027 appears to be a realistic target for meaningful relief from current supply constraints.

For now, both Samsung and SK Hynix appear positioned to benefit from the ongoing shortage, with strong pricing power and robust demand for their products. However, the companies will need to execute their expansion plans effectively to maintain their market positions as competition intensifies and new players attempt to enter the high-performance memory market.

The memory shortage represents both a challenge and an opportunity for the semiconductor industry, highlighting the critical role that memory technology plays in the AI revolution while also exposing the vulnerabilities in global semiconductor supply chains.