KB Securities on the 21st raised its target price for Samsung Electro-Mechanics to 1.6 million won from 1.4 million won, saying growth in the silicon capacitor business is gaining full momentum. The previous session's closing price for Samsung Electro-Mechanics was 1,061,000 won.
Lee Chang-min, an analyst at KB Securities, said, "Backed by the market's strong growth ahead and a broader customer base, performance related to silicon capacitors is expected to grow explosively," and noted, "In particular, embedded substrates that integrate silicon capacitors inside packaging substrates are Samsung Electro-Mechanics' own Unick and powerful product, and will be a key beneficiary business of the AI supercycle."
A silicon capacitor is a passive component manufactured through a semiconductor thin-film process. Because it can reduce the area and thickness of a semiconductor package, it is a product that can partially replace multilayer ceramic capacitors (MLCC) in fields that require miniaturization and high reliability.
Recently, demand has been rising rapidly, centered on ultra-high-performance semiconductor fields such as artificial intelligence (AI) accelerators and Neural Processing Unit (NPU). At present, only a few companies, including Murata Manufacturing and TSMC, can produce them, and Samsung Electro-Mechanics also began mass production in the first quarter of this year.
In particular, Samsung Electro-Mechanics disclosed the previous day that it had signed a silicon capacitor supply contract worth 1.6 trillion won. The supply period is two years starting in 2027. Regarding the contract, the analyst explained, "A Taiwanese foundry manufactures the silicon capacitors designed by Samsung Electro-Mechanics, then they are applied to the next-generation packaging technology of a North American leading integrated semiconductor company, and subsequently mounted in the NPU of a North American hyperscaler customer."
The analyst projected that silicon capacitor supply will expand rapidly over the mid to long term. He said, "Last year, Samsung Electro-Mechanics' annual revenue from silicon capacitors was around 20 billion won, remaining at the stage of supplying some products for North American customers' server CPUs," but added, "Samsung Electro-Mechanics performs a fabless role in the silicon capacitor business, so as long as it handles only design and testing, it can grow revenue without large-scale facility investment." He added, "Given the product's high unit price, the related operating margin will exceed 30%."