Samsung Electro-Mechanics has recorded results that exceeded market expectations by expanding the supply of high-value-added products used in artificial intelligence (AI) servers and automotive applications. The company plans to accelerate performance improvement by increasing the supply volume of products for industries and automotive applications, driven by the flagship smartphone new product launch effects of major clients in the second half of the year, as well as AI servers and advanced driver-assistance systems (ADAS).
On the 31st, Samsung Electro-Mechanics announced that it recorded a second-quarter revenue of 2.78 trillion won and an operating profit of 213 billion won. Compared to the same period last year, revenue increased by 8% and operating profit by 1%. This figure slightly exceeded the securities industry's operating profit forecast of 207 billion won.
Samsung Electro-Mechanics noted that "the increase in demand for high-value-added products such as AI, automotive applications, and servers has led to an increase in sales and operating profit compared to both the same period last year and the previous quarter, particularly in multi-layer ceramic capacitors (MLCC) for industrial and automotive applications and FC-BGA for AI accelerators." They explained that "the third quarter is expected to see continued robust demand for IT components, AI servers and networks, and ADAS products driven by the new smartphone model launches of domestic and foreign clients."
By institutional sector, the second-quarter revenue of the components division increased by 10% compared to the same period last year and by 5% compared to the previous quarter, reaching 1.28 trillion won, due to increased MLCC supplies to all applications including automotive, industrial, and IT sectors. Samsung Electro-Mechanics explained that the supply of high-value-added products has increased due to the growth of xEV and the expansion of ADAS features, as well as increased demand for AI servers and networks.
In the second half of the year, the trend of expansion in AI server investments by big corporations is expected to continue, along with strong demand for industrial and automotive applications driven by improved ADAS performance. Samsung Electro-Mechanics plans to focus on expanding new transactions in the MLCC market for AI servers and networks, while also expanding its lineup of automotive MLCC products such as high-capacity and high-voltage options.
The second-quarter revenue of the package solution division recorded 564.6 billion won, a 13% increase compared to both the same period last year and the previous quarter. Samsung Electro-Mechanics expanded the supply of high-value-added package substrates such as FCBGA for servers aimed at global big corporations and BGA for ARM processors, and noted that the FCBGA for AI accelerators, which began full supply from the second quarter, also contributed to revenue growth.
The third quarter is expected to see continued growth in the demand for FC-BGA for servers and AI accelerators, along with an increase in demand for related package substrates such as memory and system-in-package (SiP) driven by new smartphone launches. Samsung Electro-Mechanics plans to respond timely to new FC-BGA supply for servers and will expand supply focusing on products with increasing demand for BGAs.
The second-quarter revenue of the optical solution division recorded 939.3 billion won, a 3% increase compared to the same period last year. While Samsung Electro-Mechanics experienced a decline in revenue compared to the previous quarter due to seasonal demand decreases for flagship camera modules from major transactions, it explained that it expanded the supply of automotive products such as high-performance camera modules for overseas transactions and all-weather camera modules, along with in-cabin camera modules that applied hybrid lenses.
In the third quarter, Samsung Electro-Mechanics plans to timely supply high-spec camera modules for IT applications, while also expanding the supply of highly reliable automotive camera modules such as all-weather camera modules and in-cabin cameras. It aims to strengthen cooperation with various customers for new applications such as robo-taxis and humanoids.