SEOUL (Reuters) - Samsung Electronics said on Thursday it expects chip shortages to worsen and extend into 2028, after it posted a more than 250-fold jump in chip profit, countering investor concerns that feverish AI spending by major technology firms may slow and curb growth.
Shares in the world's top memory chipmaker surged as much as 8% before trading down 1.1% on Thursday.
"The supply shortage in 2027 is expected to worsen compared to this year, and it is expected to continue in 2028," Jaejune Kim, executive vice president of Samsung's memory business, told analysts on a call.
He said Samsung has signed long-term supply agreements with the top five global data centre firms and is nearing deals with five other large companies, without disclosing their names.
He said its long-term deals would last at least five years and account for 60% to 70% of its total capacity for the longer term, adding that they included upfront payments and floor pricing aimed at hedging the risks of its capital investments.
"Management's commentary on the conference call was better than expected, and it was one of the more reassuring calls we've heard in quite some time," said Ryu Young-ho, a senior analyst at NH Investment & Securities.
Samsung's bullish view follows a sharp slide in chip stocks in recent months due to investor concerns about funding for the AI infrastructure buildout and competition from China that could put chip earnings under pressure.