Samsung Electro-Mechanics projected it will post record third-quarter results, buoyed by increased investment in artificial intelligence (AI) data centers. As shortages of multilayer ceramic capacitors (MLCC) and flip-chip ball grid array (FC-BGA) substrates for AI servers deepen, it expects the share of high-value products to increase and the average selling price (ASP) to keep rising.
Samsung Electro-Mechanics said on the 30th during its second-quarter earnings conference call, "Demand for related components is expected to remain strong as AI data center investment expands and Autonomous Driving technology advances," adding, "Tight supply-demand conditions for MLCCs and FC-BGAs will intensify further."
The company said it will expand supplies of ultra-high-capacity, high-temperature, high-voltage MLCCs for AI server networks and advanced driver-assistance systems (ADAS), while continuing talks on strategic long-term agreements (LTAs) with major hyperscalers and semiconductor companies. It also plans to keep negotiating prices reflecting supply-demand conditions.
It also projected continued growth in the FC-BGA business centered on AI data centers. Samsung Electro-Mechanics plans to expand mass production of new substrates for AI accelerators and server central processing units (CPUs) for global big tech customers and increase supplies of high-value products for data centers. It said it will expand domestic and overseas production capacity (CAPA) in step with long-term supply agreements without disruption.
In the camera module business, it said it will expand supplies of high-value products for ADAS while ramping up mass production of new products for humanoids.
Samsung Electro-Mechanics said, "In the third quarter, supply shortages will deepen centered on MLCCs and FC-BGAs, and the impact of expanding long-term supply agreements and rising average selling prices will continue," adding, "We project record third-quarter results through a sharp improvement from the previous quarter and the same period a year earlier."
It added, "This trend is expected to strengthen further in the fourth quarter and into 2027," saying, "We will focus our capabilities on high-growth markets such as AI, data centers, and automotive electronics, and respond to demand changes through preemptive CAPA expansion."
It also said, "We will steadily push ahead with medium- to long-term commercialization of new businesses such as silicon capacitors and glass substrates, expanding cooperation with global big tech customers."