[Edaily Reporter Shin Ha-yeon ] On the 2nd, Meritz Securities analyzed that SamsungElectroMechanics(009150), having recently entered the market for package substrates used in artificial intelligence (AI) graphics processing units (GPUs), is seeing rising expectations for earnings growth as this development coincides with expanding demand for multilayer ceramic capacitors (MLCCs) and an upward trend in prices. In particular, since the company has already secured orders equivalent to next year’s projected revenue through a recently signed MLCC supply contract worth 879.3 billion won, the firm projected that future additional orders will lead to upward revisions in earnings estimates.

Yang Seung-soo, an analyst at Meritz Securities, noted in a report released today that the earnings announcements by Japanese competitors Ibiden and Murata provide insight into changes in business conditions across SamsungElectroMechanics’ key segments.

First, he highlighted that Samsung Electro-Mechanics is making a full-scale entry into the AI GPU package substrate market. In its recent earnings announcement, Ibiden explained that the supply landscape for AI GPU package substrates—which had previously been dominated by Ibiden and Taiwanese companies—has expanded to a three-player market with the entry of a new South Korean player.

Researcher Yang stated, “What is noteworthy about Ibiden’s latest earnings report is that it officially mentioned SamsungElectroMechanics’ entry into the AI GPU package substrate market,” adding, “This suggests that SamsungElectroMechanics has begun to secure its position as a supplier in the AI GPU ABF substrate market, moving beyond network substrates for North American clients.”

ABF substrates are high-value-added packaging substrates used in high-performance chips such as AI semiconductors and central processing units (CPUs). Amid growing demand for AI servers, a structural supply shortage in the market is expected to persist even as the number of suppliers increases.

In fact, Ibiden projected that even if the production capacities of all three suppliers were combined, they would still fall significantly short of market demand. Consequently, analysts suggest that securing production capacity is becoming more important than price competition among suppliers.

Researcher Yang assessed, “This suggests that major suppliers, including SamsungElectroMechanics, will be able to maintain high utilization rates and favorable pricing power over the medium to long term, despite aggressive capacity expansions.”

Favorable market conditions are also evident in the MLCC business. Murata recently raised its revenue guidance for data center-related sales from 325 billion yen in April and 370.6 billion yen in July to 425 billion yen. This represents a 140.5% increase year-over-year.

As demand for high-value-added MLCCs for data centers grows rapidly, while supply expansion fails to keep pace, pricing power is also strengthening. In the general-purpose MLCC market as well, price hike trends appear to be spreading, with Murata adjusting prices for some products supplied to distributors following SamsungElectroMechanics’ increase in distribution prices.

Researcher Yang stated, “Even in the general-purpose product segment, following SamsungElectroMechanics’ increase in distribution prices, Murata has adjusted prices for some products supplied to distributors, indicating that a trend toward price normalization is spreading across the industry,” adding, “The trend of price increases for general-purpose MLCCs is expected to expand further in the future.”

A large-scale supply contract recently announced by SamsungElectroMechanics is another example illustrating this supply-demand environment. On the 30th of last month, SamsungElectroMechanics announced that it had signed an MLCC supply contract worth 879.3 billion won with a major global corporation. Meritz Securities assessed that the contract value exceeded initial expectations due to the favorable supply-demand environment.

In a report released on the 29th of last month, Meritz Securities estimated SamsungElectroMechanics’ 2027 revenue from AI-use MLCCs at approximately 3.2 trillion won. The firm explained that the cumulative order volume, including this latest contract, has already reached that level.

Research Analyst Yang stated, “The cumulative order volume, including this contract, has already reached that level,” and analyzed that “future additional MLCC orders are expected to lead directly to an upward revision of the 2027 earnings estimates.” He added, “As the company is currently in discussions regarding supply contracts with a number of new clients, we expect additional orders within the year.”