[Edaily Reporter JAEMIN SONG ] SamsungElectroMechanics is rapidly expanding its long-term supply agreements (LTAs), primarily for multilayer ceramic capacitors (MLCCs) and inductors used in artificial intelligence (AI) servers. The value of LTAs signed this year alone amounts to approximately 3.6 trillion won. As power consumption surges due to the increasing performance of AI servers, driving up demand for high-capacity, high-reliability passive components, the company is securing clients through long-term contracts and expanding its business portfolio to focus on high-value-added products.

SamsungElectroMechanics announced on the 29th that it has signed a supply contract worth approximately 290 billion won with a major global corporation for MLCCs and inductors used in AI servers. According to the public disclosure, the contract value is 285 billion won (approximately $210 million), representing 2.5% of last year’s consolidated revenue. The contract period runs from January 1 to December 31 of next year. The identity of the contracting party was not disclosed to protect business confidentiality.

This is the fifth long-term agreement (LTA) SamsungElectroMechanics has announced this year. With this latest contract added to the 1.0722 trillion won MLCC supply agreement for AI servers signed earlier this month, the total value of LTAs for silicon capacitors and MLCCs and inductors for AI servers this year has risen to approximately 3.6 trillion won. The company has currently signed MLCC LTAs with about 10 global companies and is in discussions for additional contracts.

As the AI server market expands, demand for MLCCs is also growing rapidly. AI servers contain more than 10 times as many MLCCs as standard servers. Goldman Sachs forecasts that the market for MLCCs for AI servers will grow at an average annual rate of approximately 34%, rising from $1.4 billion last year to $5.8 billion by 2030. SamsungElectroMechanics holds a market share of over 40% in this sector.

In particular, as the power consumption of AI accelerators increases, there is a growing need to install MLCCs with higher capacitance in limited spaces. According to SamsungElectroMechanics, the MLCC capacitance required per graphics processing unit (GPU) in AI data centers is more than doubling every year. The company anticipates that power consumption per AI server rack will rise to 1 megawatt (MW) in the future and is responding by focusing on compact, high-capacity products.

The expansion of high-value-added products for AI and data centers is also reflected in the company’s financial results. SamsungElectroMechanics posted revenue of 3.4572 trillion won and operating profit of 440.4 billion won in the second quarter of this year. These figures represent increases of 24% and 107%, respectively, compared to the same period last year, with growth driven by increased sales of MLCCs for data centers, including AI servers and networks.

A SamsungElectroMechanics official stated, “As the global AI market becomes more technologically advanced, the required performance and reliability levels for MLCCs are also rising,” adding, “We are expanding our collaboration with global customers based on our differentiated technological capabilities and stable supply capacity.”