Samsung Electronics posted record quarterly results after its semiconductor division delivered an extraordinary 49-fold surge in profit, highlighting the scale of the global AI-driven chip boom. The world’s largest memory chipmaker warned that supply shortages are expected to worsen significantly through 2027 as demand for AI infrastructure accelerates faster than manufacturing capacity can expand.

Samsung’s chip division generated 53.7 trillion won in operating profit during the first quarter, accounting for 94% of total company earnings. The explosive growth is being driven primarily by surging demand for high-bandwidth memory (HBM) and advanced AI chips used in data centers powering platforms from Nvidia, cloud providers, and enterprise AI systems.

The company said it has already secured multi-year supply agreements with major customers seeking guaranteed access to memory chips, reflecting increasing concerns over future shortages. Samsung executives warned that even current confirmed demand for 2027 exceeds projected supply, suggesting that pricing pressure on memory products could intensify further.

Samsung is also accelerating production of next-generation HBM4 chips for Nvidia’s Vera Rubin platform and expects to more than triple HBM revenue this year. However, this AI-focused production shift is squeezing supply for conventional chips, raising costs for Samsung’s smartphone and display businesses. Its mobile division saw profits fall 35% due to rising component expenses.

Despite geopolitical risks and potential labor strikes in South Korea, Samsung says it is strengthening supply chain resilience and boosting capital expenditure to secure its AI leadership position. The company’s results reinforce the broader semiconductor industry trend: AI demand is reshaping global chip economics, driving historic profits while creating prolonged shortages across multiple sectors.