Samsung says AI memory demand will far exceed supply in 2027; leaves investors guessing on payouts

Samsung Electronics on Thursday warned of mounting pressure on memory chip supplies as demand driven by artificial intelligence applications is expected to far exceed industry supply in 2027.

Samsung, the world's largest memory chipmaker, reported record quarterly revenue of 195.3 trillion won ($136 billion) for July-September, up 14% from the previous quarter.

Its operating profit reached 107.4 trillion won, the first time a technology company exceeded 100 trillion won in quarterly operating profit.

The results were driven by its semiconductor business, which posted operating profit of 106.5 trillion won on revenue of 147.1 trillion won.

Memory chip demand remained strong amid capacity constraints, with higher market prices across applications as server demand increased.

Samsung expects AI infrastructure investment to reach a record level in 2027 as the AI ecosystem expands, with demand for memory chips growing faster than in 2026.

It plans to increase sales of high-bandwidth memory (HBM), server DRAM and solid-state drives (SSDs) to capitalise on demand.

It also aims to secure multi-year contracts and align new products with the needs of AI customers.

However, the results and outlook failed to fully satisfy investors.

Samsung Electronics shares fell more than 6% on Thursday as investors were disappointed by a lack of fresh details on plans to return its artificial intelligence-driven windfall to shareholders.

Samsung said it expected total shareholder returns for 2026 to reach between 90 trillion won and 110 trillion won, of which 35 trillion won had already been planned or completed.

The remaining returns will include a "substantial share repurchase and cancellation program, along with cash dividends".

But the company said its board would finalise the shareholder return policy, the final amount of payouts and specific plans for deploying the remaining funds at a meeting scheduled for late January 2027.

The delay leaves investors without clarity on the timing and scale of cash distributions and share repurchases, despite the company's record earnings.

The company also acknowledged "the growing market interest in the price gap between common and preferred shares" and said it was committed to "actively considering and adjusting the proportion of preferred shares" in its share repurchase and cancellation programme based on market conditions.

The company declared a third-quarter cash dividend of 4,601 won per common share and 4,601 won per preferred share, with a total payout of 30 trillion won.

The company expects full-year capital expenditure of about 84.4 trillion won, including 76.8 trillion won for its Device Solutions division, which houses its semiconductor businesses.

Looking ahead to 2027, the company expects AI infrastructure capital expenditure to reach a historic level as the AI ecosystem expands.

"Increasing AI-driven demand will far exceed the industry supply in comparison with 2026," Samsung said.