[Click e-Stock] "Samsung Electro-Mechanics Expected to Achieve Record Sales This Year... Value Reassessment Needed"

On September 11, Daishin Securities stated that it expects Samsung Electro-Mechanics to achieve record-high quarterly and annual sales in the third quarter and for the full year of 2025. The firm maintained its "Buy" investment rating and raised its target price to 225,000 won.

Daishin Securities forecast that Samsung Electro-Mechanics will post sales of 2.84 trillion won in the third quarter and 11.2 trillion won for the full year, marking its highest-ever performance. This achievement is attributed to the company's shift in portfolio focus from IT devices to artificial intelligence (AI), autonomous driving (automotive electronics), robotaxis, and humanoids, which has been positively received by the market. The fact that Samsung Electro-Mechanics' market capitalization has surpassed that of LG Electronics for the first time was also highlighted as an investment point.

The main driver behind the anticipated peak in sales and profits is the expansion of collaborations with global big tech companies. Daishin Securities researchers Park Kangho and Seo Jiweon noted, "Sales are increasing across all segments with Tesla, including FC BGA, MLCC, and camera modules. Additional sales growth is expected, given Samsung Electro-Mechanics' supply of autonomous driving chips to Tesla and Samsung Electronics' recent AI6 supply contract with Tesla." They also projected that FC BGA for AI accelerators will be supplied to Amazon and AMD, with Google, Meta, and Broadcom being added as customers in 2026.

Competitiveness and market share are also expanding in the MLCC and substrate businesses. Leveraging its strength in IT devices, Samsung Electro-Mechanics has strengthened its automotive and industrial portfolio since 2020. In the second half of this year, the MLCC utilization rate is expected to approach 95%, contributing to the expansion in industrial and automotive applications. By 2026, as autonomous vehicles and automotive electronics accelerate, limited supply increases relative to MLCC demand are expected, which could lead to some price increases.

For substrates (packages), the share of highly profitable FC BGA sales is expected to exceed 50%, and operating margin is also projected to rise due to increased AI infrastructure investment and product mix effects. The company also anticipates that higher utilization rates at its new Vietnam plant will ease fixed cost burdens, and the expansion of camera module sales to automotive customers such as Tesla will contribute to overall sales growth and profit improvement.

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