Samsung Electro-Mechanics Sees 'AI Effect' in Q3... Strengthening Competitiveness with New Businesses Next Year (Comprehensive)

Q3 Operating Profit Up 20%
Increased Sales of High-Value Products Like AI MLCC and Automotive Camera Modules

Continued Growth in AI, Automotive, and Server Markets Next Year
New Business 'Silicon Capacitors' to Begin Mass Production in Q4

Samsung Electro-Mechanics maintained solid performance in the third quarter of this year as the supply of high value-added products such as multilayer ceramic capacitors (MLCC) for artificial intelligence (AI) increased. Although some product sales are expected to weaken in the fourth quarter due to seasonal factors, the company plans to strengthen its competitiveness focusing on new businesses.

Samsung Electro-Mechanics announced on the 29th that its consolidated operating profit for the third quarter of this year was 224.9 billion KRW, a 20% increase compared to the same period last year. Sales during the same period reached 2.6153 trillion KRW, up 11% year-on-year.

A Samsung Electro-Mechanics official explained, "Performance improved as the supply of high value-added products such as AI MLCC, automotive camera modules, and server semiconductor package substrates increased due to market growth in AI, automotive, and servers."

Samsung Electro-Mechanics Busan Plant exterior. [Photo by Samsung Electro-Mechanics]

During the conference call held after the earnings announcement, the company also stated, "Sales of server MLCC are expected to more than double compared to last year, with a significant portion appearing to come from AI server sales, which is understood to be at a top-tier industry level."

Looking at the business segments, the Components division recorded sales of 1.197 trillion KRW in the third quarter, up 9% year-on-year and 3% quarter-on-quarter. This was thanks to increased MLCC supply centered on high value-added products such as industrial and automotive MLCC for AI, servers, and networks.

The Optical Communication Solutions division posted sales of 860.1 billion KRW, a 5% increase from the same period last year. This was due to increased supply of high-performance camera modules for new strategic smartphone customers and automotive camera modules for global clients.

The Package Solutions division recorded sales of 558.2 billion KRW, up 27% year-on-year and 12% quarter-on-quarter, driven by increased demand for high value-added products. The expansion of ball grid array (BGA) supply for ARM central processing units (CPUs) and increased sales of large-area, high-layer AI, server, and automotive flip-chip ball grid array (FC-BGA) substrates contributed to the performance. In particular, FC-BGA for AI and servers, mainly for CPUs, is expected to grow about twice as much as last year.

Samsung Electro-Mechanics expects some product sales to weaken in the fourth quarter due to reduced component demand from year-end seasonality, but anticipates continued growth in demand for high-performance products such as AI, automotive, and server components.

During the conference call, the company emphasized, "The growth trend centered on high value-added products will continue with expanded supply of high-end MLCC and FC-BGA products in growth areas we focus on, such as automotive and AI servers. The high growth of AI servers continues, and with the spread of on-device AI in PCs and smartphones, sales of related products such as MLCC and substrates, as well as automotive products, are expected to continue expanding, leading to growth next year compared to this year."

Preparations for new businesses are also progressing as planned. Currently, Samsung Electro-Mechanics is pursuing new businesses including silicon capacitors, hybrid lenses for automotive cameras, small solid-state batteries for mobile devices, and glass substrates.

Samsung Electro-Mechanics stated, "Silicon capacitors will begin mass production for global semiconductor companies starting in the fourth quarter, mainly for high-performance semiconductor package substrates such as AI. We plan to diversify and expand supply to domestic and overseas customers from 2025."

They added, "Hybrid lenses for automotive cameras are being prepared with the goal of mass production and commercialization in 2025. For solid-state batteries, we are conducting tests with customers on prototypes of ultra-small wearable devices using our proprietary MLCC stacking technology, aiming for mass production in 2026." They also confirmed that technology acquisition and product development for glass substrates are progressing smoothly.

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