Operating Profit Up 2% YoY... Sales Increase Across All Business Units
3Q Major Clients Launch New Products... "Expanding Supply of High-Spec Components"
Samsung Electro-Mechanics succeeded in defending its performance in the off-season second quarter. This was the result of increased sales of high value-added products such as multilayer ceramic capacitors (MLCC) for automotive electronics and substrates for servers.
On the 31st, Samsung Electro-Mechanics announced that its consolidated operating profit for the second quarter was 208.1 billion KRW, with sales of 2.5801 trillion KRW. Compared to the same period last year, operating profit increased by 1.5% and sales by 16.2%. Compared to the previous quarter, operating profit rose by 15.4%, while sales decreased by 1.7%. The results were similar to the securities firms' operating profit forecast of 207.8 billion KRW.
A Samsung Electro-Mechanics official explained, "Due to the seasonal off-season effect, supply of some products decreased, resulting in a decline in sales compared to the previous quarter. However, sales and operating profit both increased year-on-year due to increased sales of high value-added products such as industrial and automotive MLCC and high-performance semiconductor package substrates for servers."
In the third quarter, new flagship smartphones will be launched by domestic and overseas clients. The AI-related market is expected to continue growing, increasing demand for high-performance components.
A Samsung Electro-Mechanics official said, "We plan to expand the supply of high value-added products such as small-sized, high-capacity MLCCs and high-spec semiconductor package substrates like flip-chip ball grid array (FCBGA) for servers. We also plan to continuously lead the automotive parts market by discovering new customers and diversifying production locations."
Looking at the performance by division, the Component Business Division recorded sales of 1.1603 trillion KRW in the second quarter, up 15% year-on-year and 13% quarter-on-quarter. Product supply increased across all applications including IT and industrial uses such as PCs, TVs, home appliances, servers, and automotive electronics.
In the third quarter, as major clients launch new smartphones, the company plans to expand sales of industrial products. Sales of high value-added IT MLCCs and high-temperature, high-pressure MLCCs for AI servers will increase. Additionally, the Philippine production subsidiary is preparing for initial mass production of automotive MLCCs, and efforts to diversify clients will continue. This is based on the judgment that demand for automotive MLCCs is on the rise due to the ongoing electrification of internal combustion engines.
The Optical Solutions Business Division posted sales of 920.7 billion KRW in the second quarter, a 19% increase year-on-year. Sales increased compared to the previous year due to expanded supply of high-performance camera modules such as folded zoom modules for overseas clients. However, sales decreased by 22% quarter-on-quarter due to the seasonal off-season.
In the third quarter, the company plans to expand supply of high value-added products such as ultra-slim camera modules for new smartphones from major clients. The product lineup will be expanded through technological differentiation including high resolution, slim design, and ultra-macro capabilities. For automotive camera modules, preparations for year-end mass production of all-season, all-weather automotive camera modules will be made, along with strengthened cooperation with autonomous driving platform companies.
The Package Solution Business Division recorded sales of 499.1 billion KRW in the second quarter, up 14% year-on-year and 17% quarter-on-quarter. Samsung Electro-Mechanics saw increased sales of high value-added package substrates such as BGA substrates for ARM-based processors and memory, and FCBGA for servers and automotive electronics, leading to improved performance.
In the third quarter, demand for large-area, high-layer count substrates is expected to continue growing. Samsung Electro-Mechanics plans to increase supply of high value-added FCBGA products for servers and networks, as well as BGA products for AI PCs and flagship smartphones.
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