[Edaily Reporter Kim Kyung-eun ] SamsungElectroMechanics(009150)has fallen more than 40% from its recent high, but analysts predict a high likelihood of a rebound. This outlook is based on the expectation that supply shortages of multilayer ceramic capacitors (MLCCs) and flip-chip ball grid array (FCBGA) substrates will persist for the long term. Hana Securities maintained its “Buy (BUY)” investment rating and target price of 3 million won for SamsungElectroMechanics.

Kim Min-kyung, an analyst at Hana Securities, stated in a report on the 20th, “Ahead of the earnings announcement on the 30th, comments from Big Tech companies and competitors are likely to serve as a catalyst for a stock price rebound.”

She explained, “Given the lack of large-scale capacity expansions among MLCC suppliers, there is a high probability that profit margins will exceed past peak levels,” adding, “In the package solutions segment as well, the technical difficulty is rising sharply due to the increasing performance of chips, making it highly likely that the supply shortage cycle will persist for an extended period.”

He forecast that the MLCC market conditions would improve further. Analysis indicates that while the MLCC capacity utilization rates of Murata and SamsungElectroMechanics have exceeded 90% for four consecutive quarters, no large-scale capacity expansions by suppliers have materialized. As production of high-capacity, high-reliability MLCCs for AI servers takes priority, actual supply capacity—including that for general-purpose products—is actually shrinking. With the addition of NVIDIA’s new “Rubin” product and the launch of the iPhone, supply and demand are expected to become even tighter in the second half of the year.

Structural supply constraints are also expected to persist for FCBGA substrates. As package substrates become larger and more multilayered due to improvements in AI accelerator performance, manufacturing difficulty is increasing significantly; consequently, supply expansion is expected to be limited despite capacity expansions by global substrate manufacturers.

SamsungSecurities projected SamsungElectroMechanics’ revenue for this year at 13.4274 trillion won and operating profit at 1.7140 trillion won. For next year, it estimated revenue of 16.0783 trillion won and operating profit of 3.3918 trillion won, representing a 97.9% year-over-year increase in operating profit. The operating profit margin is forecast to improve from 12.8% this year to 21.1% next year.