[Edaily Reporter kyoungeun kim ] SamsungElectroMechanics(009150)is expected to post second-quarter operating profit that significantly exceeds market expectations, driven by strong demand for flip-chip ball grid array (FC BGA) and multilayer ceramic capacitors (MLCC)—key components for artificial intelligence (AI) data centers.
On the 7th, DaishinSecurities maintained its “Buy” (BUY) rating on SamsungElectroMechanics and raised its target price by 16.6% from 2.4 million won to 2.8 million won.
Park Kang-ho, an analyst at DaishinSecurities, stated, “Second-quarter operating profit is expected to reach 423.9 billion won, exceeding the previous estimate of 387.0 billion won and the consensus estimate of 385.6 billion won by 9.5% and 9.9%, respectively,” adding, “This will be the highest level since the third quarter of 2021 (445.8 billion won), which was the previous quarterly record.”
Second-quarter revenue is projected to reach 3.279 trillion won, up 17.7% year-over-year and 2.2% quarter-over-quarter. Analysts note that the company has entered a phase where the growth rate of operating profit (up 99.0% year-over-year and 51.1% quarter-over-quarter) is expanding at a faster pace than revenue growth.
Furthermore, the company forecast that “quarterly operating profit will expand to 513.1 billion won in the third quarter and 529.0 billion won in the fourth quarter, setting new all-time highs.”
Annual operating profit is expected to continue its strong growth, reaching 1.747 trillion won in 2026 (up 91.2% year-over-year), 2.605 trillion won in 2027 (up 49.1%), and 3.11 trillion won in 2028 (up 19.4%). Accordingly, earnings per share (EPS) estimates for 2026 and 2027 have been revised upward by 12.6% and 27.1%, respectively, compared to previous estimates.
The first investment highlight cited was the worsening supply shortage of AI-oriented semiconductors and key data center components. He stated, “As infrastructure investment for AI data centers expands and the trend toward higher-spec semiconductors continues, demand for server-grade FC BGA and MLCC is exceeding expectations,” adding, “These components, used in AI semiconductors and data centers—areas where Big Tech and hyperscalers are focusing their efforts—are maintaining high order volumes and prices by establishing an equal footing with Japanese competitors.”
He continued, “The proportion of mid- to long-term contracts has increased relative to short-term contracts, and some price hikes are also underway,” adding, “We have entered a phase where operating profit margins are rising sharply as the mix effect is maximized through an expanded share of high-value-added products.” SamsungElectroMechanics’ company-wide operating profit margin is projected to surge from 8.1% in 2025 to 13% in 2026, 17% in 2027, and 18.3% in 2028.
The high growth of the FC BGA business is also drawing attention. Analyst Park projected, “As the share of AI server-bound products increases, annual FC BGA sales will grow by 71.2% to 2 trillion won in 2026 and increase by more than 28.9% to 2.57 trillion won in 2027.” He also anticipated that average supply prices would continue to rise, reflecting an increase in the number of layers, rising raw material costs, and supply shortages.
Finally, he highlighted the improving profitability of the MLCC business. Analyst Park stated, “Amid strong demand for server applications, order intake is expanding due to supply constraints—with only Japan’s Murata and SamsungElectroMechanics capable of meeting demand—and profitability is expected to exceed forecasts thanks to revenue growth centered on high-value-added products.” He added, “The 454 billion won order secured on the 29th of last month also demonstrates an increase in long-term contracts over short-term ones.”
He explained, “In 2027, revenue from silicon capacitors will be factored in, serving as an additional driver for operating profit growth,” adding, “Silicon capacitors are also emerging as essential next-generation components for AI and data centers.” He continued, “With MLCC capacity utilization rates in Japan and at SamsungElectroMechanics remaining around 95%, conditions for price increases are in place,” and concluded, “There is still a possibility that annual EPS could be raised further.”