Samsung Electro-Mechanics shares were strong in early trading on the 19th. Buying is seen concentrating on expectations that prices of multilayer ceramic capacitors (MLCCs) for artificial intelligence (AI) servers could rise.
As of 9:43 a.m. that day, Samsung Electro-Mechanics was trading at 351,000 won, up 41,500 won (13.41%) from the previous trading day. It climbed as high as 357,000 won intraday, hitting a 1-year high.
Murata Manufacturing, the world's largest MLCC supplier, said on the 17th during the Lunar New Year holiday that demand for MLCCs for AI servers is outstripping supply and mentioned the possibility of price hikes. Murata said it plans to decide within this quarter whether to raise prices.
On this, Yang Seung-su, a Meritz Securities researcher, said, "The operating margin of Samsung Electro-Mechanics' component division has shown a high correlation with the MLCC utilization rate over the past 10 years."
Yang said, "Samsung Electro-Mechanics' current MLCC utilization rate is at the 90%–95% level, so the room for earnings improvement through further utilization gains is limited," but added, "Expectations have formed around whether prices of high-spec MLCCs for AI servers will rise as a key variable for upward revisions to future earnings estimates."