Samsung Electro-Mechanics, which has surged more than 680% this year, is plunging 16% on the 2nd. The drop is seen as profit-taking after a rapid run-up in the share price.
As of 9:12 a.m. on the day, Samsung Electro-Mechanics is trading on the Korea Exchange at 1,809,000 won, down 196,000 won (9.78%) from the previous session. Early in the session it traded in the 1.6 million won range, down 16%, but the decline is narrowing on bargain hunting.
Samsung Electro-Mechanics shares spiked as growth prospects for its semiconductor substrates and multilayer ceramic capacitors (MLCC) businesses came to the fore on the back of expanded investment in artificial intelligence (AI) infrastructure. The stock, which was in the 200,000 won range early this year, soared more than 680% this year and traded in the 2 million won range on the previous day.
However, given the rapid rise in the share price over a short period, the move is seen as profit-taking supply hitting the market.
Brokerages still see strong share price growth for Samsung Electro-Mechanics. Demand for semiconductor substrates and MLCCs is surging, raising expectations for higher average selling prices (ASP), and the cycle has lengthened on the back of long-term agreements (LTA).
Park Jun-seo, an analyst at Mirae Asset Securities, said, "A structural growth phase has begun for semiconductor substrates (FC-BGA) for AI servers and networks and for the capacitor business," and added, "On top of this, we expect substrate average selling prices (ASP) to rise 20% and MLCC ASP to rise 10% from 2027."
Park added, "Starting this year, global big techs' AI CAPEX is expected to expand for several years," and explained, "With substrates effectively sold out, we are seeing advances such as clients paying deposits, increased investment subsidies, and the signing of long-term exclusive contracts."