Samsung’s semiconductor division posted 53.7 trillion won ($36.1 billion) in operating profit during the first quarter of 2026, accounting for roughly 94% of the company’s total quarterly profit as soaring AI memory demand drove record sales. Meanwhile, SK hynix reported record quarterly revenue of 52.6 trillion won ($35.5 billion), and operating profit of 37.6 trillion won ($27.8 billion), fueled largely by booming HBM sales for AI infrastructure.
Brace for a barren landscape of new hardware launches, as AI demand reshapes the world of consumer electronics
Samsung and SK hynix shorten memory contracts as pricing power shifts back to suppliers
Memory will consume 30% of hyperscaler data center spending this year, a 4X increase over 2023
Part of the problem is cyclical. The memory industry has historically swung between oversupply and shortages. However, analysts increasingly believe this cycle is different, as growth in AI infrastructure is consuming hardware at unprecedented rates.
To address the crisis, the companies are aggressively expanding production capacity and increasing investment in advanced packaging and memory fabrication. According to the Korea Times , recent regulatory filings show that Samsung Electronics invested 465.4 billion won in its Xi’an memory chip plant in 2025, a 67.5% year-over-year increase. SK hynix also significantly increased spending, investing 581.1 billion won into its Wuxi facilities and 440.6 billion won into its Dalian operations.
However, semiconductor fabrication plants and advanced memory packaging facilities take years to expand and ramp up, meaning supply growth cannot catch up to the pace of AI-driven demand.
The memory crunch is joining a growing list of resource shortages emerging from the AI explosion.
GPU shortages have already become severe across parts of the industry. Earlier this month, we reported Intel’s confirmation that extreme demand had become so intense that customers were even buying chips that might previously have been discarded or treated as low-value products.
Power is becoming another major bottleneck. AI data centers are consuming enormous amounts of electricity, forcing technology companies to seek increasingly unconventional energy solutions. Earlier this month, Meta Platforms backed plans involving space-based solar power systems that could theoretically beam solar energy back to Earth to help support future AI infrastructure demands.
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Etiido Uko is an engineer and technical writer with over nine years of experience in documentation and reporting. He is deeply passionate about all things gadgets, technology, and engineering. ","collapsible":{"enabled":true,"maxHeight":250,"readMoreText":"Read more","readLessText":"Read less"}}), "https://slice.vanilla.futurecdn.net/13-4-22/js/authorBio.js"); } else { console.error('%c FTE ','background: #9306F9; color: #ffffff','no lazy slice hydration function available'); } Etiido Uko Social Links Navigation News Contributor Etiido Uko is an engineer and technical writer with over nine years of experience in documentation and reporting. He is deeply passionate about all things gadgets, technology, and engineering.
Kindaian So we are doomed. For getting memory in the market we need the AI companies to go bankrupt. If that happens, the economy will tank. So we are on a zugzwang situation. If we play we loose, if we don't play we loose. Reply
Marlin1975 If demand does not change sure. But the "free" money will run out and with even OpenAI admitting they can't even meet their own conservative numbers of users that day may come a lot sooner than then. Reply
xiq Kindaian said: So we are doomed. For getting memory in the market we need the AI companies to go bankrupt. If that happens, the economy will tank. So we are on a zugzwang situation. If we play we loose, if we don't play we loose. The AI bubble is going to pop, it's only a question of when. The earlier it pops, the less consequential it will be on the global economy, and the sooner hardware prices go back to normal. It's kind of a lose less now or lose more but later, and you can't really do anything about it as an individual than hope it's the least terrible conclusion to this crisis. Reply
80251 It sounds like there's no good outcome to these shortages of SSDs and memory products, in the long term or the short term. Where are these AI companies getting the capital to buy all this gear? Who's funding them and how are they profiting from AI in the short term? Reply
xiq 80251 said: It sounds like there's no good outcome to these shortages of SSDs and memory products, in the long term or the short term. Where are these AI companies getting the capital to buy all this gear? Who's funding them and how are they profiting from AI in the short term? Where they get their capital? apparently they're doing a thing called circular funding. I will not pretend I really know how that works, but it's the word being thrown around. As for how they're profiting in the short term, they aren't, ai companies are losing money everyday and have no idea how they're even supposed to make a profit. the only ones who are truly profiting from this are the memory manufacturers like samsung and sk hynix selling ram to everyone. Reply
umeng2002_2 The crash is going to be very hard. Reply
Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
- https://www.tomshardware.com/tech-industry/artificial-intelligence/SPONSORED_LINK_URL
- https://www.tomshardware.com/tech-industry/artificial-intelligence/samsung-and-sk-hynix-warn-ai-driven-memory-shortages-could-last-until-2027-and-beyond-as-hbm-demand-explodes-customers-already-reserving-supply-years-ahead-while-the-wider-dram-market-begins-to-tighten#main
- https://www.tomshardware.com
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Informational only. No financial advice. Do your own research.