Samsung Electronics has warned that the global semiconductor shortage could stretch through 2028, a timeline far longer than many in the industry had anticipated. The forecast is already pushing major customers to lock in long-term supply agreements with the South Korean giant.
Why the shortage is expected to persist
Samsung's projection reflects a structural imbalance between surging demand and limited production capacity. The company, one of the world's largest chipmakers, sees the deficit continuing for years as new fabrication plants take time to come online and as demand from automotive, data center, and consumer electronics sectors remains strong. The warning comes after years of supply chain disruptions that began during the pandemic.
Customers shift strategy
In response, clients that once relied on spot purchases are now approaching Samsung for multiyear supply contracts. These deals typically guarantee a set volume of chips at agreed prices, giving buyers more certainty in an unpredictable market. The shift marks a departure from the traditional model, where chipmakers sold most of their output on a quarterly or annual basis.
What the long-term deals mean
For Samsung, locking in customers early could help justify the billions of dollars it is spending on new fabrication capacity. For buyers, the contracts offer protection against future price spikes and allocation shortages. But they also carry risks: if demand softens or technology shifts, customers could be stuck with commitments to older chips. The deals are still being negotiated, and the terms are not public.
The chip shortage has already disrupted production of cars, smartphones, and medical devices. Samsung's extended forecast suggests those pressures will not ease soon. Other chipmakers, including TSMC and Intel, have also warned of tight supply, but Samsung's 2028 timeline is among the longest publicly stated.
