Two of the world’s top chipmakers warned on Thursday that a surging demand for artificial intelligence processors was squeezing the supply of conventional DRAM chips, creating a shortage of semiconductors for computer and smartphone companies.
The warnings came from Korean chip giants Samsung Electronics and SK Hynix, which together control two-thirds of the DRAM chip market and count the likes of Apple and Nvidia as customers.
“PC and mobile customers are having difficulties securing memory supplies, as they are being directly and indirectly affected by supply constraints and strong demand for server-related products,” Park Joon Deok, head of DRAM marketing at SK Hynix, told analysts on a post-earnings call.
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The race to build AI infrastructure has prompted chipmakers to divert manufacturing capacity toward high-bandwidth memory (HBM) for AI servers. HBM chips are used to build AI chipsets and are more lucrative than DRAM processors.
Meanwhile, chip firms have also been conservative about adding more production lines in recent years after they were left bruised by an aggressive capacity expansion in 2017.
At the time, a massive boom in chip demand led companies like Samsung to invest in new production lines, but those quickly became a liability when demand cooled between 2018 and 2019.
The resulting current reluctance among chipmakers to expand capacity has also contributed to the current supply shortage. Samsung has said any such expansion would remain limited in 2026 and 2027.
Prioritising AI demand
Samsung prioritised supplying server customers in the fourth quarter and plans to continue increasing the portion of AI-related products, a move that could lead to further constraints in the output of conventional memory chips.
Samsung’s aggressive push into AI memory chips comes as the tech giant seeks to narrow its market share gap with SK Hynix in the lucrative segment.
SK Hynix, a leading chip supplier for Nvidia, led the HBM chip market last year with a 61% share, followed by Samsung at 19% and Micron at 20%, according to Macquarie Equity Research.
SK Hynix vowed on Thursday to maintain its “overwhelming” market share in the next-generation HBM4 chips, highlighting intensifying competition with Samsung, as they vie for market share in the AI chip race.
Smartphone firms brace for impact
As the crunch is set to persist, some manufacturers have already started adjusting their products to cope with growing margin pressure, the chip shortage and surging prices.
“Due to a recent surge in memory chip prices, PC and mobile customers are adjusting purchase volumes,” SK Hynix said in its earnings conference call.
“Some customers are taking a more conservative approach to shipment plans or considering adjusting (memory chip) specification in their price-sensitive product ranges.”
Research firms IDC and Counterpoint both now expect global smartphone sales to shrink at least 2% this year, reversing earlier forecasts for growth. The PC market is expected to shrink at least 4.9% in 2026, IDC estimated, after an 8.1% growth last year.
Samsung, the world’s second-largest smartphone maker, is also bracing for the impact of the chip shortage, with its mobile business profit slumping 10% in the fourth quarter.
Cho Seong, a Samsung mobile business executive, warned of a “challenging year” in 2026, expecting flat global smartphone shipments this year and risks of downward adjustment due to memory chip prices.
Investors will look for comments from its bigger smartphone rival Apple on how it aims to navigate a global memory chip crunch, as it reports quarterly results later on Thursday.
- Reuters, with additional editing and inputs from Vishakha Saxena
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