"Storage Shortage" Continues! Samsung Executive: Chip Demand Will Remain Strong This Year Amid AI Wave

A Samsung Electronics executive said on Wednesday that, driven by the global artificial intelligence wave, chip demand is expected to remain strong this year, but rising storage chip prices could impact computer and mobile phone shipments.

“Due to the increasing demand for artificial intelligence and the resulting ongoing shortage of storage chips, we expect the business environment to remain favorable,” said Koh Dong-jin, Co-CEO of Samsung Electronics, at the company’s annual shareholders’ meeting in Suwon, South Korea.

He added, “Risks still exist, including uncertainties in the global macroeconomic environment such as tariffs, as well as cost pressures faced by end-product businesses (such as TVs, smartphones, and home appliances).”

Strong demand for AI data centers has led to a global semiconductor supply shortage, constraining the supply of storage chips across industries like automotive, computers, and smartphones.

Samsung’s stock price hit a new all-time high this year, rising 62% since January, outperforming the Korean market’s 34% increase.

This performance is attributed to the significant price hikes by Samsung and its competitors SK Hynix and Micron amid the global storage chip shortage. These three companies dominate the global storage chip market.

According to Samsung’s latest forecast, memory shortages could persist until 2028. SK Hynix even predicts that storage chip shortages may last until 2030.

At last year’s shareholder meeting, Koh apologized to shareholders for Samsung’s initial missed opportunities in the AI chip market, which led to a decline in stock price and earnings, and tried to reassure frustrated shareholders.

However, the situation has improved significantly since then. After NVIDIA CEO Jensen Huang announced that Samsung would produce new AI chips for NVIDIA, Samsung’s stock surged on Tuesday and continued to rise nearly 6% on Wednesday.

Analysts say Huang’s comments have fueled expectations that Samsung’s foundry division—manufacturing logic chips for Tesla, Apple, and Samsung’s mobile division—could turn profitable as early as next year, after years of billions in annual losses.

Although Samsung’s chip business is currently booming, potential strikes are causing concern among shareholders. Due to growing dissatisfaction among employees over wage gaps with major competitors, Samsung’s union is voting on whether to strike in May and has threatened to halt chip production.

Koh Dong-jin acknowledged that previous weak chip earnings led to reduced performance bonuses, causing Samsung to fall behind competitors in salary competitiveness. However, he stated, “Since last year, as our semiconductor products have regained competitiveness, performance bonuses have started to rebound, and we expect the gap in salary competitiveness to gradually narrow.”