As the artificial intelligence (AI) and Robotics markets gain momentum, analysts say parts suppliers of Samsung and LG Group are poised to grow this year. For Samsung Electro-Mechanics, demand tied to the expansion of AI servers is spreading from memory chips to multilayer ceramic capacitors (MLCCs), a key driver of earnings growth. LG Innotek is broadening its business into robot components to secure new revenue sources. However, for both companies, rising market uncertainty from U.S. and Israeli strikes on Iran is emerging as a "variable" that could hinder growth. That is because they are export corporations that earn most of their revenue overseas, and major end markets such as smartphones are expected to contract this year due to the war.
On the 4th, consensus compiled by financial data firm FnGuide (the average of securities firms' forecasts) estimated that Samsung Electro-Mechanics will post annual results of 12.7204 trillion won in revenue and 1.3145 trillion won in operating profit this year. Securities firms projected the company's revenue to rise 12.4% and operating profit 43.9% from a year earlier.
Samsung Electro-Mechanics is expected to show marked earnings growth starting in the first quarter. Consensus for the period stands at 3.0649 trillion won in revenue and 287.8 billion won in operating profit. Compared with a year earlier, revenue is up 11.9% and operating profit is up 43.5%.
LG Innotek's annual consensus for this year comes to 23.2941 trillion won in revenue and 871.8 billion won in operating profit. Securities firms say revenue could climb 6.4% and operating profit 31.1% from last year. For the first quarter, revenue is estimated at 5.2451 trillion won, up 5.3% on-year, with operating profit at 169 billion won, up 35.1%.
◇ MLCC supply shortage persists… price hikes in sight
The backdrop for expectations that Samsung Electro-Mechanics and LG Innotek will grow this year from a year earlier is the "activation of the AI market." As AI services spread, demand for the necessary components to run them is surging. Securities firms commonly analyze that both companies' high-density AI semiconductor substrate businesses, such as flip-chip ball grid array (FC-BGA), will see strong growth this year.
The companies' flagship products are also closely tied to the AI market, creating a situation where demand is outstripping supply. MLCCs produced by Samsung Electro-Mechanics are a prime example. MLCCs store and supply electricity and remove unwanted signals (noise). They are used in most products with electric circuits—including smartphones, AI servers and electric vehicles—and are called the "rice of the electronics industry." As AI server usage rises, demand is increasing for high-capacity, ultra-compact, high-quality MLCCs that withstand high temperatures and high voltages.
The AI server MLCC market is effectively split between Samsung Electro-Mechanics and Japan's Murata. Both are keeping related production line utilization around 90%, yet are still said to be falling short of market demand. As a result, assessments say price hikes are coming into view. Because both are concentrating production on the more profitable AI server MLCCs, supply of general-purpose products is being constrained.
According to the industry, MLCC prices in distribution channels are currently up 10%–20% from November last year. Channel prices are typically seen as a leading indicator of manufacturers' pricing policies. Murata has in fact said recently it is considering raising MLCC prices. The industry expects Samsung Electro-Mechanics to adjust its prices in line with Murata's move once the policy is announced.
Ko Eui-young, an analyst at iM Securities, said, "Production lines for server-use and IT-use MLCCs are largely shared, and if the persistence based on real demand is confirmed, Samsung Electro-Mechanics and Murata are highly likely to shift line operations toward server applications," adding, "Most MLCC makers mention expansion plans of around 10%, but anything beyond that is unrealistic due to the challenge of securing engineers." He added, "If Murata implements price hikes in the third quarter and Samsung Electro-Mechanics follows, there is significant room for earnings upgrades," and "MLCCs and FC-BGAs are improving in the same direction, and since AI is the common driver of demand, the environment is ripe for a rerating."
◇ Zeroing in on the robot market, leveraging camera module capabilities
LG Innotek is focusing on securing new revenue sources in step with the activation of the physical AI (AI embedded in robots and devices to perceive physical space and make autonomous decisions) market. Its strategy is to leverage its camera module manufacturing capabilities to deliver results in the robot components market.
The market is watching that LG Innotek is co-developing a "vision sensing system" for robots with Boston Dynamics, the robot company of Hyundai Motor Group. Analysts say that once Boston Dynamics begins mass production of its Humanoid Robot "Atlas," LG Innotek's results will improve accordingly. In particular, the company's ongoing talks to supply humanoid camera modules to a major North American customer are cited as a factor boosting expectations for better earnings. In addition, the recent start of mass production of a lidar camera for supply to a European automaker is expected to positively affect growth.
LG Innotek has formed a Robotics task organization under the chief technology officer (CTO) to develop robot components. Based on this, it plans to expand its business across physical AI components—starting with vision sensing and moving into actuators, motors and tactile sensors. LG Innotek President Moon Hyuk-soo told reporters at "CES 2026" earlier this year, "Revenue has begun to be generated from future new businesses based on fundamental optical technologies. Mass production of sensing components for robots began this year, and sales are in the hundreds of billions of won."
However, for both Samsung Electro-Mechanics and LG Innotek, heightened global market uncertainty from the recent armed clashes in the Middle East is seen as a drag on earnings growth. Exports account for 96% of both companies' cumulative revenue through the third quarter. With the United States and Israel attacking Iran, the Strait of Hormuz, a passage that handles about 20% of the world's oil supply, has been effectively shut. Rising oil prices, higher logistics burdens and weaker consumption could all hurt results.
In particular, the smartphone market—an important destination for Samsung Electro-Mechanics and LG Innotek products—is expected to contract sharply due to the war. Market research firm Counterpoint Research projected smartphone shipments this year could fall 12% from last year to 1.1 billion units. It would be the smallest market since 2013.
A researcher at a market research firm who requested anonymity said, "Both Samsung Electro-Mechanics and LG Innotek do not operate production facilities in the Middle East, so the direct and short-term impact is limited," but added, "If the situation drags on, a hit will be unavoidable for all export corporations."