Samsung Ends LPDDR4 Memory Production Amid 50x Profit Surge, Predicts Increasing Memory Shortages by 2027

In a significant shift, Samsung has ceased the production of its older LPDDR4 memory, acknowledging anticipated supply challenges that may worsen into 2027.

Samsung Ends Production of LPDDR4 Memory to Prioritize Advanced Technologies for AI Growth

Samsung has officially confirmed the discontinuation of its legacy DRAM technologies, specifically LPDDR4X and LPDDR4. This decision is reflected on the company’s website, where both memory standards are designated as “Discontinued.”

The primary motive behind this strategic pivot is Samsung’s intention to redirect production capacity toward more advanced and lucrative memory solutions, including LPDDR5, LPDDR5X, and HBM. The demand for these technologies is soaring—particularly from AI data centers that require high-performance storage solutions. Nevertheless, despite ramping up its production capabilities, Samsung anticipates that the memory shortage landscape will intensify in 2027.

During a recent earnings discussion, Samsung’s executives pointed out that the gap between supply and demand for 2027 is predicted to be more severe than in 2026, emphasizing increasing strain on the DRAM market pipeline. This situation emerges amidst a booming interest in AI technology and its storage requirements.

“Our supply falls far short of customer demand, ”Kim Jaejune, a Samsung memory chip business executive, told analysts during the post-earnings call.“Based solely on the demand currently received for 2027, the supply-to-demand gap for 2027 is set to widen even further than in 2026.”

Samsung via Reuters

Despite the challenges in supply management, Samsung has reported robust financial performance. In Q1 2026, the company’s profits surged approximately 50 times compared to the previous year, illustrating the substantial appetite for memory products driven by the AI sector.

Bar chart illustrating Samsung's Q1 profit increase due to the AI chip boom shows significant profit growth in Q1 2026. — Image Source: Reuters

In response to this evolving landscape, Samsung is aggressively enhancing its DRAM manufacturing capabilities. Recently, the company also ceased the production of older MLC-based NAND Flash memory, enabling entry-level competitors to capitalize on the market void left by Samsung’s strategic changes.

However, Samsung is anticipating potential disruptions from an impending 19-day labor strike, which could escalate to a month-long work stoppage if worker grievances are not adequately addressed. This labor issue may result in an estimated 4% disruption in the production of both DRAM and NAND Flash memory and could prolong the timeline for recovery in production capacity.

For additional details, you can refer to the news source: Reuters.

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