[Edaily Reporter Kim Kyung-eun] On the 4th, Meritz Securities maintained its “Buy” rating on #Samsung Electro-Mechanics and raised its target price from 1.9 million won to 2.1 million won.

Yang Seung-soo, an analyst at Meritz Securities, stated, “While concerns about a short-term correction are growing as Samsung Electro-Mechanics’ stock price plummeted 17.3% over the past one to two days,” he added, “there is no change in the direction of the three core growth drivers—multi-layer ceramic capacitors (MLCCs), ABF substrates, and silicon capacitors (Si-CAPs)—that have been driving the stock price.”

Yang explained, “Recent moves by passive component distributors to build up inventory are expanding to levels reminiscent of the historic supply shortages seen in 2017–2018.”

High-capacity MLCCs for AI servers are expected to enter a phase of severe supply shortages starting in the second half of the year, and competition among major clients to secure long-term supply agreements (LTAs) is expected to intensify. Researcher Yang emphasized, “MLCCs are emerging as strategic assets in the AI era,” adding, “There is a high probability that the MLCC price hike cycle will strengthen further.”

The sustainability of Si-CAP orders has also been confirmed. #Samsung Electro-Mechanics has already signed a Si-CAP supply contract worth 1.557 trillion won with a major global company, with the investment period spanning from January 2027 to December 2028.

Researcher Yang predicted, “EMIB-T, the Si-CAP client’s proprietary 2.5D packaging technology, is a structure that applies through-silicon vias (TSVs) to silicon bridges within the package substrate to enhance inter-chip connectivity and power delivery efficiency,” adding, “As the adoption of EMIB-T expands, the scale of Si-CAP adoption will also continue to grow.” Si-CAP sales are expected to grow rapidly, from 30 billion won in 2026 to 555 billion won in 2027 and 1.0271 trillion won in 2028.

Researcher Yang noted, “Amid a growing supply-demand imbalance in the ABF substrate market, it appears that the company’s major competitors have successfully implemented price hikes of around 15–20% starting in the second quarter,” adding, “Samsung Electro-Mechanics is also highly likely to join in raising prices, given the favorable supply-demand environment.”

The rationale for the upward revision is a multiple adjustment driven by rising stock prices within the sector. He added, “If the key growth momentum we anticipate materializes,
, we plan to reflect this sequentially by raising our earnings estimates."