Samsung and SK Hynix warn: Prioritizing AI leads to a shortage of traditional chips, global smartphone and PC shipment guidance turns negative

The two major global DRAM chip manufacturers, Samsung Electronics and SK Hynix, issued a warning on Thursday that strong demand driven by AI data center construction is squeezing the production capacity of memory chips for traditional consumer electronics, which may lead to supply shortages for global PCs and smartphones.

These two giants, which together account for about two-thirds of the global DRAM market share, stated that the supply of conventional DRAM chips for personal computers and smartphones will remain tight in order to prioritize fulfilling orders for higher-margin high-end server memory chips (such as HBM). Major consumer electronics brands like Apple are their core customers, and supply chain risks are accumulating.

This structural shift has forced market research firms to lower industry expectations. IDC and Counterpoint recently adjusted their global smartphone sales forecast for 2026 from growth to a contraction of at least 2%, and downgraded the PC market expectation from growth to a contraction of at least 4.9%. Amid the AI infrastructure investment boom, consumer electronics manufacturers are facing the dual challenges of profit squeeze and supply chain instability.

PC and smartphone manufacturers face supply difficulties

Park Joon Deok, head of marketing for SK Hynix's DRAM business, clearly pointed out during the earnings call:

“PC and mobile device customers are facing challenges in securing memory supply, and they are being directly or indirectly impacted by supply constraints and exceptionally strong demand for server-related products.”

In response to this round of shortages and the subsequent sharp price increases, some manufacturers have begun to adjust their strategies. SK Hynix revealed:

“Due to the recent rapid rise in memory chip prices, PC and mobile customers are reassessing their procurement pace. Some customers are adopting a more conservative attitude towards shipping plans or are considering adjusting the memory specifications of their price-sensitive product lines to control costs.”

As the world's second-largest smartphone manufacturer, Samsung Electronics is also preparing for the potential impacts of chip shortages. Its mobile business saw a 10% decline in profits in the fourth quarter. Samsung mobile business executive Cho Seong warned that 2026 will be “a challenging year,” expecting global smartphone shipments to remain roughly flat this year, with risks of having to lower shipment expectations due to rising memory chip costs.

Capacity shifts towards AI chips

The intense competition in AI infrastructure construction is guiding major global chip manufacturers to strategically shift their production capacity towards higher-margin AI server-specific products like high-bandwidth memory (HBM), leading to a structural adjustment that continues to squeeze the supply of conventional DRAM chips for traditional consumer electronics. For example, Samsung Electronics has clearly prioritized meeting the needs of server customers in the fourth quarter and plans to continue increasing the proportion of AI-related products in its production capacity, which may further limit the output of conventional memory.

Additionally, the tight supply situation in the industry is exacerbated by manufacturers' conservative expansion strategies. Following the industry pains brought about by aggressive expansion during the last super cycle in 2017, chip manufacturers have generally adopted a cautious attitude towards adding new capacity. Samsung stated that this cautious capital expenditure trend is expected to continue into 2026 and 2027, meaning that capacity expansion will remain limited in the foreseeable future, making it difficult to quickly alleviate the supply shortages caused by the shift in demand structure

HBM Market Competition Intensifies

Samsung Electronics is actively expanding its presence in the AI memory chip market, striving to narrow the gap in market share with leader SK Hynix in the lucrative high bandwidth memory (HBM) sector. According to Macquarie stock research data, SK Hynix dominated the HBM chip market last year with approximately 61% market share, while Samsung accounted for 19% and Micron about 20%. Currently, SK Hynix is the main supplier of HBM chips for NVIDIA.

In the face of competition, SK Hynix clearly stated on Thursday that its goal is to maintain an "overwhelming" market share in the next-generation HBM4 chips, highlighting the intensifying competition between the two companies in the advanced storage chip sector that will determine the future of AI computing power.

The market is also paying attention to another key development: Apple Inc. will release its quarterly earnings report after the U.S. stock market closes on Thursday, and investors are eager for management to comment on how to address the current global supply tightness in memory chips, which may reveal the supply chain pressures faced by the consumer electronics giant and its response strategies