Due to IT Demand Slowdown... Samsung Electro-Mechanics Q3 Operating Profit Down 32% (Comprehensive)

Growth in Military-Grade Product Market... MLCC Sales Hit Hard
Q4 Faces Seasonal Slump... Uncertainty in IT Component Demand Continues

Product photo of Samsung Electro-Mechanics semiconductor package substrate (for CPU).
[Photo by Samsung Electro-Mechanics]

[Asia Economy Reporter Han Yeju] Samsung Electro-Mechanics' operating profit in the third quarter of this year decreased by more than 30% compared to the same period last year due to a decline in IT set demand and inventory adjustments. However, there were some improvements in business structure through growth sectors such as automotive multilayer ceramic capacitors (MLCC), camera modules, and package substrates.

Samsung Electro-Mechanics announced on the 26th that its consolidated operating profit for the third quarter of this year was 311 billion KRW, down 32% (144.8 billion KRW) from the same period last year. Compared to the previous quarter, it decreased by 14% (49.1 billion KRW).

During the same period, sales amounted to 2.3837 trillion KRW, down 6% (164.1 billion KRW) from the same period last year and down 3% (71.9 billion KRW) from the previous quarter.

By segment, the component division's third-quarter sales were 929.8 billion KRW, down 30% year-on-year and 18% quarter-on-quarter. Automotive products saw increased sales due to diversification of customers and expansion of high value-added product supply, but were directly hit by decreased demand for IT sets such as smartphones and PCs. Although uncertainty in IT component demand is expected to continue in the fourth quarter, demand in the automotive market is expected to remain solid. Samsung Electro-Mechanics plans to respond to IT market demand focusing on ultra-small and ultra-high capacity products for smartphones and expand supply of high-reliability automotive MLCC products that withstand high temperature and high pressure.

The optical communication solutions division recorded sales of 901.4 billion KRW, up 14% year-on-year and 16% quarter-on-quarter, due to expanded supply of high-performance camera modules for new flagship smartphones from major domestic and overseas customers and high-reliability automotive camera modules. Demand is expected to weaken in the fourth quarter due to the year-end seasonal off-season. Samsung Electro-Mechanics plans to timely respond to high-resolution camera modules for new flagship smartphones and expand supply of high-resolution automotive camera modules.

The package solutions division's third-quarter sales reached 552.5 billion KRW, up 26% year-on-year and 3% quarter-on-quarter, driven by expanded supply of 5G, network, and automotive package substrates. Although demand for some IT products is expected to slow in the fourth quarter, demand for high value-added semiconductor package substrates for servers, networks, and automotive sectors is expected to continue growing. In particular, the company plans to secure a sales growth foundation by mass-producing server FCBGA and expanding supply of network and automotive substrate products.

This content was produced with the assistance of AI translation services.