Samsung Electro-Mechanics (009150.KS) has signed long-term agreements (LTAs) to supply multilayer ceramic capacitors (MLCCs) with about 10 customers, including global big tech and semiconductor companies. As demand for high-performance MLCCs rises rapidly amid the surge in artificial intelligence (AI) data center investment, customers have moved preemptively to secure supply. Samsung Electro-Mechanics is also receiving requests from companies seeking additional long-term contracts, in addition to its existing contracted customers.
Samsung Electro-Mechanics said on the 30th that it posted revenue of 3.4572 trillion won and operating profit of 440.4 billion won in the second quarter on a consolidated basis. Compared with the same period last year, revenue rose 24% and operating profit rose 107%. Both also increased from the previous quarter, by 8% and 57%, respectively.
The results also beat market expectations. The consensus (average of estimates) compiled by the financial investment industry over the past month was 3.3181 trillion won in revenue and 413.9 billion won in operating profit. Actual results exceeded the forecasts by about 139.1 billion won in revenue and 26.5 billion won in operating profit. The operating margin also came in at 12.7%, surpassing the market estimate of 12.5%.
The top contributors to the earnings growth were AI servers and automotive components. Sales of high-capacity MLCCs used in AI servers and network equipment increased. Supply of flip-chip (FC) ball grid array (BGA) products for AI accelerators and server central processing units (CPUs) to global big tech customers also expanded. Rising sales of camera modules for advanced driver assistance systems (ADAS) and autonomous vehicles added further momentum.
In particular, a "supply pre-emption battle" is intensifying in MLCCs. Samsung Electro-Mechanics has signed long-term supply agreements with about 10 customers, including top-tier hyperscalers and major semiconductor companies. This is because the importance of high-performance MLCCs — which provide stable power and eliminate circuit noise (unnecessary electrical signals) — is growing as AI accelerators' computing performance and power consumption rise simultaneously.
"We have secured stable supply based on the long-term supply agreements already signed with global customers," a Samsung Electro-Mechanics official said. "We plan to actively respond to major customers that request additional contracts."
By business division, the Component Solution division, which handles MLCCs, showed the most notable growth. The division's second-quarter revenue reached 1.6494 trillion won, up 29% from the same period last year. Revenue of the Package Solution division, which handles semiconductor substrates, was 771.6 billion won, up 37% year-on-year. The Optics & Communication Solution division posted revenue of 1.0362 trillion won, up 10% year-on-year but down 4% from the previous quarter.
Samsung Electro-Mechanics plans to continue its growth in the third quarter, centered on AI components. It will begin full-scale mass production of FC-BGA for new AI accelerators and server CPUs, and will push ahead with expanding production facilities at home and abroad without disruption. In MLCCs, the company will expand supply of the most advanced products for AI applications and strengthen its high-capacity, high-voltage product lineup targeting the autonomous driving and eco-friendly vehicle markets. It will also broaden the applications of camera modules. The company plans to increase supply of high-performance cameras for a strategic customer's new foldable phones, while also entering the camera markets for global electric vehicle makers' next-generation platforms and humanoid robots.
"Demand for high-performance components for data centers and automotive electronics will continue to increase as AI infrastructure investment and autonomous driving technology spread," a Samsung Electro-Mechanics official said. "We will sustain our growth through expanded supply of high-value-added products and preemptive securing of production capacity."
