[Click eStock] "Samsung Electro-Mechanics, Overseas Investors' Interest Poured into AI-oriented MLCC"

On the 9th, Korea Investment & Securities stated, "Overseas investors have shown great interest in the growth potential of multilayer ceramic capacitors (MLCC), one of Samsung Electro-Mechanics' key products."

KPCA Samsung Electro-Mechanics Exhibition Booth

Korea Investment & Securities held an investment conference in New York, USA, from the 2nd to the 4th, introducing domestic companies to overseas investors. At this event, foreign institutional investors asked numerous questions about how Samsung Electro-Mechanics plans to respond to the decline in demand for MLCCs and package substrates caused by the investment stagnation in artificial intelligence (AI).

In response, Samsung Electro-Mechanics explained that there are many opportunities for sales expansion in AI and automotive sectors. Analyst Park Sang-hyun of Korea Investment & Securities, based on Samsung Electro-Mechanics’ investor relations (IR) presentation, stated, "AI servers are equipped with 10 times more MLCCs than general servers," adding, "High-value-added products designed for high temperature and high pressure environments are used, resulting in sales per server unit being more than 20 times that of general servers." He also analyzed, "The amount of MLCCs mounted on AI PCs is 10% higher than on general PCs," and "Sales per PC unit are more than 30% higher."

Analyst Park explained, "The automotive sector will also act as a major growth driver for MLCCs," noting, "MLCCs are intensively used in powertrains, advanced driver-assistance systems (ADAS), and infotainment." Accordingly, "Samsung Electro-Mechanics aims for MLCC sales growth in the 20% range this year, centered on AI and automotive sectors, with an operating profit margin target in the mid-teens percentage range."

He further explained, "Due to the global oversupply of package substrates, the operating rate of Samsung Electro-Mechanics’ high-value-added semiconductor substrate, the flip chip ball grid array (FC-BGA), has dropped to around 60%," adding, "They are responding to supply-demand imbalances by focusing on server applications with strong growth momentum." He continued, "They are expanding their hyperscaler customer base by agreeing to supply FC-BGA to one of the North American hyperscalers (large cloud service providers)," and predicted, "As the number of customers increases significantly from next year, the profitability of the substrate business will also improve."