As Nvidia launched its latest artificial intelligence (AI) semiconductor Blackwell series this year, it has been identified that the supply of multilayer ceramic capacitors (MLCC) from Samsung Electro-Mechanics has significantly increased. The amount of MLCC applied to servers equipped with the Blackwell platform is approximately 10 times higher compared to the previous generation product, the Hopper platform. Since Samsung Electro-Mechanics and Japan's Murata are dominating the market for MLCC used in AI servers, there is an analysis that Samsung Electro-Mechanics will greatly benefit.
MLCC is often called 'the rice of the electronics industry' and is a crucial component for the operation of electronic devices. It acts as a 'dam' that stores electricity and releases it in certain amounts, requiring many thin layers stacked as thinly as possible to accumulate a large amount of electricity. The operating profit of the components division, which handles Samsung Electro-Mechanics' MLCC business, was 290.1 billion won in the first half of the year, accounting for about 70% of the total operating profit of Samsung Electro-Mechanics. According to the company's semiannual report, Samsung Electro-Mechanics' market share in the MLCC sector for the first half of the year is approximately 25%, ranking second in the world after Japan's Murata.
According to the industry on the 31st, for servers equipped with Nvidia's latest AI semiconductor Blackwell platform, approximately 10 times more MLCC is employed compared to the previous series, the Hopper platform. Servers using the Hopper platform utilized about 30,000 MLCC, which is approximately 10 times more than a regular server, while the Blackwell platform is expected to have 300,000 MLCC integrated, which is ten times more than the Hopper.
It is analyzed that Samsung Electro-Mechanics has maximized production to meet the demand for MLCC since the first half of the year. The MLCC operating rate of Samsung Electro-Mechanics surpassed 95% in the first half of the year, and it is expected to maintain high operating rates until the end of the year. According to the company's semiannual report, the average operating rate of MLCC in the first half of the year was 98%. Given that IT demand typically increases in the second half compared to the first half, the operating rate of the MLCC production line is expected to reach its maximum in the second half.
There is also an analysis that Samsung Electro-Mechanics will greatly benefit from the growth of the AI server and the market for MLCC used in these servers. While the supply of MLCC for AI servers has significantly increased, the market for MLCC for AI servers is oligopolized by Murata and Samsung Electro-Mechanics. It is known that Samsung Electro-Mechanics holds about 40% of the MLCC market for AI servers.
An industry source noted, "AI MLCC must meet conditions such as high temperature and high pressure, so the manufacturing difficulty is high, and Murata and Samsung Electro-Mechanics are effectively dominating the market," adding, "Considering the oligopolistic structure and the high operating rates of Samsung Electro-Mechanics, AI MLCC is expected to contribute to improving profitability."
In the case of AI MLCC, it is a high-value product with operating profit margins that are about 3 to 4 times higher than regular MLCC, and it is projected that annual operating profit will grow compared to last year. According to the financial information company FnGuide, Samsung Electro-Mechanics' operating profit forecast for this year is 821.1 billion won, an increase of about 11% compared to last year's 735 billion won.
Go Sun-young, a researcher at Yuanta Securities Korea, said, "While demand for IT sets (finished goods) remains sluggish, demand for servers is robust," adding, "Especially since there are limited corporations able to supply high-value MLCC, benefits are concentrated around Japanese and Korean companies."