Samsung Electro-Mechanics will expand long-term supply agreements (LTA) for multilayer ceramic capacitors (MLCC) with global Big Tech and major chipmakers and increase production capacity for AI Semiconductor substrates to respond to rising investment in artificial intelligence (AI) data centers.
Samsung Electro-Mechanics said on the 30th during its second-quarter earnings conference call, "We have signed MLCC long-term supply agreements with about 10 customers, including hyperscalers and major chipmakers," and added, "We are actively responding to additional requests for long-term supply agreements."
The company said component business results grew as demand for data center MLCCs for AI servers, networks, and telecommunications equipment increased significantly.
The component division's second-quarter revenue was 1.6494 trillion won, up 29% from the previous quarter. Sales of data center MLCCs for AI servers, networks, and power expanded, and supply of automotive MLCCs also increased with the advancement of advanced driver-assistance systems (ADAS) and growth of the electric vehicle (xEV) market.
Samsung Electro-Mechanics projected that strong demand for high-capacity, high-reliability MLCCs will continue in the third quarter as AI infrastructure investment grows. While expanding supply of cutting-edge products for AI, the company also plans to increase the share of high-capacity, high-voltage products in line with growth in the Autonomous Driving and electric vehicle markets.
It also expected the semiconductor substrate business to continue benefiting from rising AI demand.
Samsung Electro-Mechanics said, "Demand for high-value FC-BGA substrates for AI data centers will continue to rise," adding, "We will expand mass production of new products for AI accelerators for global Big Tech and server central processing units (CPU), and increase supply of high-value substrates for AI data centers by expanding production capacity at home and abroad."
The optical solutions division posted second-quarter revenue of 1.0362 trillion won. That was down 4% from the previous quarter but up 10% from a year earlier. The company said smartphone camera modules dipped slightly due to seasonally weak demand, but supply of high-value products such as high-resolution, folded zoom, and optical image stabilization (OIS) expanded, maintaining year-over-year growth.