[Click e-Stock] "Samsung Electro-Mechanics Enters High-Value MLCC Price Increase Phase"

On October 15, Sangsangin Securities stated that Samsung Electro-Mechanics is expected to see a reduced decline in performance during the seasonal off-season, thanks to the expansion of its high-value MLCC (Multi-Layer Ceramic Capacitor) and FC-BGA (Flip Chip Ball Grid Array) product lineup for AI (Artificial Intelligence) servers. The company raised its target price by 50,000 won to 230,000 won, while maintaining its buy recommendation.

On this day, Jung Minkyu, an analyst at Sangsangin Securities, explained, "Strong demand for high-value MLCCs for automotive electric and electronic components and AI servers is not only driving higher utilization rates but is also leading the market into a period of price increases."

For the third quarter, Samsung Electro-Mechanics is expected to post sales of 2.7854 trillion won and operating profit of 254.3 billion won. These figures represent year-on-year increases of 9.8% and 13.6%, respectively, aligning with the market consensus. Jung noted, "With increased investment in AI servers and robust demand for automotive components, shipments of high-value MLCCs are concentrated, keeping utilization rates in the high 90% range."

By business segment, the component division is projected to record sales of 1.4179 trillion won (an 18.5% increase year-on-year), the optical communication division 842.7 billion won (a 0.1% increase), and the package division 591.7 billion won (a 6.0% increase). Jung expects, "Qualitative growth will continue," adding, "Rising demand for high-capacity MLCCs for AI servers and automotive applications, increased MLCC adoption due to IT product specification improvements, and growing demand for FC-BGA for servers will persist beyond the fourth quarter."

He particularly highlighted the entry into a period of price increases due to supply shortages as a key investment point. He stated, "Just as the multi-layer structure of HBM (High Bandwidth Memory) has encroached on general memory production capacity, the increase in high-capacity MLCC products with more layers will lead to tight supply and price increases, even with capacity expansions."