Samsung Plans Record 84.4 Trillion Won Investment as AI Memory Shortage Stretches Toward 2028

A record spending plan meets an already crowded order book

Samsung Electronics plans to spend 84.4 trillion won on factories and equipment in 2026, with 76.8 trillion won directed to semiconductors, as the company expects memory chip shortages to continue through 2028. Announcing the plan alongside its third quarter results on October 29, Samsung said its planned supply of high bandwidth memory for 2027 was already sold out.

The investment would exceed Samsung's previous facility spending record of 54 trillion won in 2024 by 30.4 trillion won, or about 56%. Including research and development, total investment could reach 140 trillion won this year. Samsung is accelerating projects in Pyeongtaek, South Korea, and Taylor, Texas, while seeking longer customer commitments to support that expansion.

The spending comes after Samsung reported quarterly revenue of 195.25 trillion won and operating profit of 107.44 trillion won. Its semiconductor division generated 106.5 trillion won of that operating profit, about 99.1% of the company total. Smartphones, televisions and home appliances faced a different reality: the division responsible for those products lost 800 billion won for a second consecutive quarter.

Samsung's results reveal two sides of the same memory shortage. Higher chip prices and demand from artificial intelligence data centres are bringing enormous earnings to its semiconductor business, while rising component costs are squeezing the products that use those chips. The company's response combines factory expansion, new memory products and contracts extending years into the future.

Where the 84.4 trillion won will go

Samsung has allocated about 91% of its annual facility budget to Device Solutions, the division responsible for semiconductors. Samsung Display will receive 3.9 trillion won to upgrade existing production lines and improve their performance. The remaining 3.7 trillion won has no disclosed allocation.

Third quarter facility spending reached 29 trillion won, including 27.2 trillion won for semiconductors. Spending through September totalled 56.9 trillion won, leaving 27.5 trillion won to reach the annual estimate during the final quarter. That would keep investment close to the pace recorded between July and September.

The annual plan is 31.7 trillion won higher than spending in 2025, implying a previous annual total of 52.7 trillion won. Samsung is therefore planning an increase of about 60% in a single year. Its investment priorities include new memory factories, supporting infrastructure and foundry capacity, where Samsung manufactures chips designed by other companies.

Samsung described the January 1 to December 31 investment plan as an estimate that may change with market conditions. It has not finalised an annual spending amount for 2027, even as it prepares further expansion to serve AI and high performance computing customers.

HBM4 moves to the centre of Samsung's memory business

Samsung's fastest growing memory products include HBM4, the sixth generation of high bandwidth memory. HBM stacks memory chips together so that large amounts of information can move quickly to processors. That makes it useful for AI systems, whose processors need a steady stream of data to perform calculations.

Kim Jae-jun, Samsung's executive vice president and head of Memory Strategy Marketing, described the speed of the expansion during the earnings discussion:

Third-quarter HBM4 revenue increased at least threefold from the previous quarter,

HBM4 accounted for about 60% of Samsung's HBM revenue in the quarter. Samsung also said it had achieved its annual objective of bringing its HBM market share to the level of its broader DRAM share, which stood at 38% in the second quarter. DRAM is the working memory that computers use while running programs.

Kim said customers continued to seek more supply despite completing their orders for the following year:

All HBM supply volumes for 2027 have been sold out, and requests for additional supply continue to come in.

Samsung said negotiations for those volumes had concluded at prices reflecting its products' competitiveness. Customers are securing both quantities and prices before the year begins, giving Samsung firmer commitments as it expands expensive production facilities.

Long contracts support expansion, but factories take time

Samsung has signed long term memory supply agreements with 10 major customers and is negotiating with another 10. It aims to place 60% to 70% of its production capacity under such agreements by 2030. The customer base is spreading beyond large AI infrastructure operators to mobile, automotive and network businesses.

Those agreements connect the two sides of the expansion. Customers gain a more predictable supply of essential chips, while Samsung gains commitments that help it plan factories and equipment purchases. Contracts covering several years are particularly useful when construction takes much longer than the quarterly cycle used to measure earnings.

Kim expects supply to remain tight in 2028 because new factories need considerable time to move from construction to wafer production. Wafers are the thin discs on which chips are manufactured. Higher equipment prices, longer equipment delivery times and the larger individual chips used in newer HBM products also make capacity harder to expand quickly.

Samsung expects AI memory demand to exceed supply by a wider margin in 2027 than in 2026, supported by what it forecasts will be record investment in AI infrastructure. Its plan is to secure production space early, then adjust equipment installation to customer demand. The company is therefore increasing spending while also trying to match new capacity with confirmed orders.

Pyeongtaek and Taylor take different roles

Samsung has brought forward the planned opening of Pyeongtaek Campus Line 5 by two years to 2028. The South Korean facility will produce advanced memory. Construction plans for a second fab are also moving ahead earlier than scheduled, expanding the infrastructure available for future production.

Taylor, Texas, is central to Samsung's foundry investment. Its first cleanroom has begun operating and equipment is being installed. A cleanroom is a tightly controlled manufacturing space where dust and other particles are kept away from delicate chip production processes.

Samsung is reviewing further foundry expansion, including additional fabs in the United States and South Korea, and plans to increase advanced packaging capacity. Packaging connects and protects chips, and advanced methods allow several components to work closely together in demanding computing systems.

Kang Seok-chae, a vice president in Samsung's foundry business, forecast that the number of orders for projects using its 2 nanometer process would more than double in 2026 compared with 2025. Samsung also expects demand for processes at 8 nanometers and below to exceed capacity next year. These process names identify generations of manufacturing technology used to produce increasingly complex chips.

The foundry business is benefiting from sales of HBM base dies, which help connect stacked memory, and from more advanced manufacturing orders. Samsung's System LSI business also increased sales of systems on chips and image sensors, while pursuing customised chip projects and customers beyond mobile devices.

The next products extend beyond HBM

Samsung shipped samples of its next generation HBM4E in May and said initial customer feedback was positive. It plans to begin mass production in the first half of 2027 and increase output more substantially in the second half.

KB Securities forecasts that HBM4 will account for about 80% of Samsung's HBM revenue in 2027, compared with about 40% across 2026. Those annual estimates cover different periods from Samsung's reported 60% share for the third quarter. The brokerage also forecasts HBM average selling prices rising by 100% to 150% from a year earlier.

Samsung is expanding server DRAM and solid state drives alongside HBM. DRAM holds information that processors need immediately; solid state drives, or SSDs, retain data for longer. Samsung expects AI agent services, which perform tasks through multiple steps, to increase demand for storage as they generate and retain more information.

The company plans to commercialise a 256 terabyte QLC SSD early in 2027. QLC is a type of flash memory that stores four bits of information in each cell, allowing large amounts of data to fit into a drive. Samsung is also preparing to expand production using its 4 nanometer and 2 nanometer foundry processes.

Record earnings show how much memory now matters

Samsung's third quarter revenue rose 126.9% from a year earlier, while operating profit increased 783.1%. Revenue and operating profit both reached records for a fourth consecutive quarter, extending a run that began in the final quarter of 2025.

The operating margin reached 55%, up from 52.2% in the previous quarter. In simple terms, Samsung recorded 55 won in operating profit for every 100 won of sales, before items such as taxes and financing costs. Net profit was approximately 75.14 trillion won, up 514.6% from a year earlier.

Memory revenue reached 140.7 trillion won, increasing 427% from a year earlier after growth of 471% in the second quarter. The memory business was estimated to have earned 108 trillion won in operating profit, slightly above the 106.5 trillion won reported for the semiconductor division containing it, reflecting weaker results elsewhere within that division.

Samsung said currency movements reduced operating profit by about 10 trillion won compared with the previous quarter, mainly in its components businesses. Growing sales and higher chip prices outweighed that pressure. DRAM average selling prices rose about 20% from the previous quarter, while NAND flash prices increased by a percentage in the high teens.

Research spending is rising alongside factory investment. Third quarter research and development costs were 14.4 trillion won, up 63% from a year earlier. Spending through September reached about 41.76 trillion won, already roughly 11% above the 37.7 trillion won spent during all of 2025.

Phones and appliances feel the cost squeeze

Samsung's Device eXperience division recorded revenue of 52.1 trillion won, up 8% from the previous quarter, but lost 800 billion won. The loss matched the preceding quarter and contrasted with operating profit of 3.5 trillion won a year earlier.

Mobile eXperience revenue reached 37.3 trillion won, helped by premium devices including the Galaxy Z Fold8. The combined mobile and networks businesses nevertheless recorded an operating loss of 600 billion won. Televisions and home appliances generated combined revenue of 13.9 trillion won and lost 200 billion won.

Memory costs, raw material prices and logistics expenses weighed on the finished products businesses. Samsung said mobile memory supply had been tight since the fourth quarter of 2025 as AI server demand expanded. Its executives expect weaker smartphone demand to continue into 2027, and the company plans to sell a greater share of premium devices while reducing costs.

Samsung announced no consumer price increases. For device makers, sustained component inflation means pressure on the amount earned from each sale and difficult choices about product pricing and specifications. Samsung Display and Harman remained profitable: the display business earned 1.1 trillion won on revenue of 8 trillion won, while the automotive and audio subsidiary earned 600 billion won on revenue of 4.3 trillion won.

A large dividend comes with a January decision

Samsung approved a third quarter cash dividend totalling 30 trillion won, with both common and preferred shares receiving 4,601 won per share. The shareholder record date was September 30, and payment is scheduled for November 27.

The company plans total shareholder returns of 90 trillion to 110 trillion won for 2026 through dividends and share repurchases and cancellations. Cancelling repurchased shares reduces the number of shares outstanding. At the upper end, the programme would be about 5.4 times Samsung's previous record of 20.3 trillion won in 2020.

Samsung puts the remaining amount at 55 trillion to 75 trillion won after deducting 35 trillion won already distributed or committed. A calculation deducting only the newly announced 30 trillion won dividend leaves 60 trillion to 80 trillion won; the difference is the additional 5 trillion won included in Samsung's committed total.

The board is due to approve the final return amount, execution details and the next shareholder return policy in late January 2027. Samsung also plans to consider a larger proportion of preferred shares in its repurchases. Its current policy, covering 2024 through 2026, returns 50% of free cash flow, the cash remaining after operating needs and capital investment.

The dates that shape the expansion

Samsung's schedule stretches from this year's dividend payment to factory openings and contract targets several years away. The milestones show why current spending and customer commitments must be planned together.

• May 2026: Samsung shipped HBM4E samples to customers.
• September 30, 2026: Record date for the third quarter dividend.
• October 29, 2026: Samsung announced third quarter results and its 84.4 trillion won annual facility investment estimate.
• November 27, 2026: Scheduled payment of the 30 trillion won dividend.
• Late January 2027: Board decision on the next shareholder return policy and remaining distributions.
• First half of 2027: Planned start of HBM4E mass production, followed by a larger production increase in the second half.
• 2028: Planned start of operations at Pyeongtaek Campus Line 5.
• 2030: Target for long term agreements to cover 60% to 70% of production capacity.

Samsung expects semiconductor strength to lift its 2027 company results above 2026. Delivering that growth will require turning construction projects, equipment installations and new products into chips customers can use, while its consumer businesses work to restore profitability under the same cost pressures driving memory earnings.

Key Points

• Samsung plans 84.4 trillion won in facility investment in 2026, including 76.8 trillion won for semiconductors.
• Planned HBM supply for 2027 is sold out, and Samsung expects memory shortages to continue through 2028.
• HBM4 generated about 60% of third quarter HBM revenue after sales increased at least threefold from the previous quarter.
• Semiconductors produced 106.5 trillion won of Samsung's 107.44 trillion won quarterly operating profit.
• The phones and appliances division lost 800 billion won for a second consecutive quarter.
• A 30 trillion won dividend is payable November 27, with further shareholder return decisions due in late January 2027.