NH Investment & Securities announced on May 15 that it has raised its target price for Samsung Electro-Mechanics from 1 million won to 1.5 million won, a 50% increase, citing the beginning of a price increase cycle for multi-layer ceramic capacitors (MLCC). The firm maintained its "buy" rating on the stock.
In a report released that day, analyst Hwang Ji-hyun stated, "With the price increases for some MLCC products starting, we have adjusted our earnings estimates upward."
Hwang noted that Samsung Electro-Mechanics plans to raise prices for certain MLCC products aimed at distributors, adding, "Given the recent supply and demand situation, there is a high possibility that price increases will spread to other product lines in the future."
She also highlighted that the shipment-to-order ratio (BB ratio) for Japanese companies Murata and Taiyo Yuden reached 1.36 and 1.31, respectively, in the first quarter of 2026, marking the highest levels in five years since 2021. Both companies reported strong ongoing demand for AI-related MLCCs, with operating rates expected to remain above 90% throughout the year.
Hwang explained that AI servers are increasingly adopting Integrated VR (IVR) structures, which integrate power supply paths with CPUs and GPUs, or Vertical Power Delivery (VPD) structures that stack components vertically. "In their earnings announcements, Samsung Electro-Mechanics, Murata, and Taiyo Yuden all mentioned this trend," she said.
She added, "This requires technologies to mount MLCCs in an array format on substrates or embed them internally. Unlike other MLCC manufacturers, Samsung Electro-Mechanics has a packaging division, which is expected to enhance its competitive edge through synergy."
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.