SEOUL, April 30 (AJP) - Samsung Electronics said surging artificial intelligence demand is likely to keep memory markets exceptionally tight well into next year, with orders now extending as far as 2027, underscoring the depth of the current supply squeeze.
The company, already swamped with orders stretching into next year, said the extraordinary tightness will persist and that production will remain unaffected even if labor action proceeds.
“Our capacity far lags behind customer demand amid extremely tight inventory levels. Demand far exceeds our capacity, with coverage at a historic low,” Kim Jae-joon, executive vice president of memory strategy and marketing, said on a conference call Thursday after the company confirmed record quarterly results for the three months ended March.
The imbalance has deepened to the point where Samsung is accepting orders for 2027, including long-term agreements (LTAs) with key clients to secure business visibility.
Driven by aggressive expansion, Samsung expects its next-generation HBM4 chips to account for more than half of total high bandwidth memory (HBM) sales by the third quarter.
The Device Solutions (DS) division posted record earnings, generating 53.7 trillion won ($39.2 billion) in operating profit on revenue of 81.7 trillion won, translating into an operating margin of 65.7 percent — still trailing domestic rival SK hynix’s 71.5 percent.
Addressing market views that conventional DRAM is currently more profitable than HBM due to recent price spikes, Samsung said it would not prioritize short-term gains.
“A balanced supply of both HBM and conventional DRAM is essential to sustain AI-driven demand,” the company said. “We will maintain a balanced product mix, taking into account mid- to long-term growth and long-term customer relationships.”
In a move to enhance shareholder returns, Samsung said it will cancel remaining treasury shares equivalent to 1.2 percent of common stock and 1.7 percent of preferred shares, valued at about 14.6 trillion won ($10.6 billion) based on the board resolution date.
Capital expenditure reached 11.2 trillion won in the first quarter, with 10.2 trillion won allocated to expanding semiconductor facilities.
Labor tensions, however, remain a key overhang.
Management said it is seeking to resolve disputes through dialogue and avert a planned 18-day strike from May 21, while pledging to keep production lines running even if a walkout occurs.
Samsung confirmed consolidated operating profit of 57.23 trillion won on revenue of 133.87 trillion won. Beyond the semiconductor business, the Device eXperience (DX) division posted operating profit of 3 trillion won on sales of 52.7 trillion won.
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