DB Investment Securities said on the 28th that Samsung Electro-Mechanics is expected to extend its growth on the back of demand for multilayer ceramic capacitors (MLCC) for artificial intelligence (AI) servers.
DB Investment Securities maintained a Buy investment rating on Samsung Electro-Mechanics and raised its target price to 240,000 won from 190,000 won. That is about 25% higher than DB Investment Securities' closing price on the 26th.
Researcher Cho Hyeon-ji at DB Investment Securities estimated Samsung Electro-Mechanics' full-year operating profit this year at 840 billion won on a consolidation basis. That is 14% higher than last year. The researcher projected operating profit in 2026 to exceed 1 trillion won for the first time since 2022.
Cho cited MLCCs as the key driver of profit growth. Cho projected that, based on production line efficiency improvements, Samsung Electro-Mechanics will reduce the share of general-purpose IT MLCCs in the mid- to long term and increase the share of industrial MLCCs. The intent is to reorganize around high value-added product lines.
In particular, AI servers are equipped with MLCCs in quantities 100 times larger than standard servers. Also, because they must accommodate high capacity within a limited size, MLCCs for AI servers must meet ultra-compact, high-capacity standards.
"Companies with the technology to stably produce high-end AI server-grade MLCCs are limited to Samsung Electro-Mechanics and Japan's Murata Manufacturing," Cho said, adding, "We expect Samsung Electro-Mechanics' AI-driven benefits to continue over the mid to long term."