Samsung Electronics has officially announced that it has sold out its supply of high bandwidth memory (HBM) for next year after completing negotiations. The company anticipates a memory supply shortage that will last until 2028, with demand for long-term supply contracts (LTA) expanding beyond hyperscalers to include the mobile and automotive sectors.
During a conference call on October 29, Samsung stated, "The supply volume for HBM in 2027 has been negotiated at target prices considering product competitiveness, and it is already sold out. We continue to receive requests for additional volume from major customers."
In the third quarter, HBM4 sales increased more than threefold compared to the previous quarter, reaching about 60% of total HBM revenue. The company also noted that it achieved its goal of securing HBM market share equivalent to its overall DRAM market share in the second half of the year.
Samsung has adjusted its supply outlook to extend through 2028. The company explained, "Due to rising construction costs and advance payments for equipment, the scale of facility investments may appear inflated. Additionally, the long lead time from new construction to wafer production makes it difficult for next year's investment increases to contribute significantly to bit production by 2028." The increasing die size of HBM4E and HBM5 is also cited as a constraint on supply.
Samsung has completed long-term supply contracts with 10 major clients and is negotiating with another 10 key customers. The client base is expanding to include not only hyperscalers and server companies but also mobile, automotive, and network firms. The company aims to fill 60-70% of its production capacity with long-term contracts by 2030.
Investment plans are tightening as well. This year's total facility investment is projected at 84.4 trillion won, an increase of 31.7 trillion won from the previous year, with the semiconductor (DS) sector accounting for 76.8 trillion won. Research and development (R&D) expenses for the third quarter were 14.4 trillion won.
In the foundry sector, Samsung expects utilization rates for processes below 8nm to exceed 100% next year, prompting expansions in 8, 4, and 2nm capacities. The first phase of the Taylor fab in the U.S. has begun cleanroom operations and equipment installation, with construction of the second phase set to commence soon. The company anticipates that high-performance computing (HPC) revenue will exceed 50% next year. Development of test chips for 1.4nm has been confirmed with some customers.
In NAND, the rise of agentic AI has led to a surge in demand for server SSDs, with plans to commercialize a 256-terabyte (TB) QLC SSD utilizing 32-layer stacking technology in early 2027.
For shareholder returns, Samsung plans to allocate 55 to 75 trillion won in remaining funds for cash dividends and share buybacks and retirements, while also considering increasing the proportion of preferred stock buybacks. Specific execution plans and new policies for 2027 and beyond will be finalized at the board meeting at the end of January.
* This article has been translated by AI.
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