Samsung and the Semiconductor Cycle Balancing AI Growth with 2028 Risk
The Device Solutions division of Samsung Electronics achieved its highest financial results in 2026 because of ongoing memory semiconductor shortages. The management team has decided to concentrate on the forthcoming global market changes that they anticipate will occur in 2028. The organization currently faces difficulties in expanding AI infrastructure production capacity while avoiding the forecasting mistakes that caused previous overproduction problems.
The current market expansion stems from increased High Bandwidth Memory (HBM) requirements which serve as the primary driver of demand. Major technology firms including Nvidia AMD and Broadcom continue to consume the majority of HBM production capacity. The industry has experienced secondary effects because of the market focus on AI centric memory products
- HBM Dominance Both Samsung and SK Hynix now attribute more than 50% of their DRAM revenue to HBM products.
- Consumer Shortages Standard DRAM required for smartphones and PCs and servers only has limited availability because production lines now concentrate on HBM.
- Process Migration Samsung accelerates its transition process to 10nm 5th generation (1b) and 6th generation (1c) DRAM processes to achieve better operational performance.
The South Korean production clusters require Samsung and SK Hynix to increase their investments because they need to match market requirements. Samsung is currently expanding new lines at its Pyeongtaek plant and upgrading the Hwaseong facility. The company SK Hynix currently dedicates its resources to M15X plant operations and its facilities located in Icheon and Cheongju.
The Yongin semiconductor cluster functions as the permanent operational center for government backed semiconductor initiatives. The current investment phase 1 is in progress while phase 2 will boost mass production capabilities to achieve major growth by 2028. The production capacity increase for this period will exceed the manufacturing capacity requirements of worldwide production facilities.
The 2028 global market will experience oversupply because Korean manufacturers increase their production capacity while international competitors expand their manufacturing operations. The following companies currently conduct their operations
- Micron (USA) The company expands its DRAM capacity across three countries Taiwan Singapore and the United States through substantial investments in HBM equipment.
- Kioxia (Japan) & YMTC (China) Both companies are expanding their production capacity of NAND flash devices while enhancing their technological capabilities.
- NAND Market Volatility The analysts predict that NAND prices will drop and excess inventory will develop faster than DRAM because more companies operate in the NAND market than in DRAM.
The erratically changing demand patterns of AI products combined with the shorter supply cycles have made semiconductor market predictions more difficult to achieve. The business support office at Samsung has established more stringent verification requirements for all upcoming investment projects. The company implemented this cautious method to counteract the unpredictable market conditions that occurred during previous years of operation.
The industry will obtain results from equipment orders which were placed today by 2028. The Samsung company aims to sustain its operational efficiency during the peak period of 2026 while developing financial strength to withstand market declines within the following two years.
