The components affiliate of Samsung Electronics disclosed the two-year contract on Tuesday, with deliveries running from January 1, 2027 through December 31, 2028.
Shares surged as much as 10 percent to end Tuesday 9.42 percent up at 1,060,400 won to rejoin the "emperor stock" level — a Korean term for shares trading above 1 million won apiece.
They roared on, jumping 10.93 percent to 1,177,000 won as of 11:00 a.m., with brokerages rushing to raise target prices up to 1.6 trillion won.
The stock has risen more than tenfold from its 52-week low near 110,000 won last December, lifted by the AI component cycle. The buyer of the silicon capacitors was not identified, though analysts expect the components to go into next-generation neural processing units and advanced packaging at a top North American hyperscaler.
The order is the clearest signal yet that Samsung Electro-Mechanics has broken into a supply chain long dominated by a few incumbents. The silicon capacitor market has been concentrated among suppliers including Japan's Murata Manufacturing and U.S.-based Empower Semiconductor, with the top five holding an estimated 63 percent of 2024 revenue, because of high technical barriers and lengthy customer certification cycles. The contract, while modest against the company's roughly 3 trillion won in quarterly revenue, marks its entry as a qualified supplier to the AI hardware market.
KB Securities maintained a "buy" rating and raised its target price 14 percent to 1.6 million won from 1.4 million won, lifting its five-year operating profit compound annual growth rate estimate to 61 percent from 53 percent. DB Securities also moved its target to 1.6 million won and said the company's long-term market capitalization could reach 120 trillion won. Daol Investment & Securities raised its target to 1.5 million won from 1.05 million won, projecting 2027 revenue of 15.9 trillion won and operating profit of 3 trillion won.
Silicon capacitors are next-generation passive components built on silicon wafers through thin-film processes. They can be made as thin as 50 micrometers, against 200 micrometers or more for the ultra-compact multilayer ceramic capacitors, or MLCCs, that have been Samsung Electro-Mechanics' mainstay, sharply reducing the area and thickness constraints inside a semiconductor package. Their equivalent series inductance — a property that impedes alternating current in high-frequency conditions — is roughly 100 times lower than conventional MLCCs, at 2 to 3 picohenries.
That makes them the leading option for stabilizing voltage in AI processors, where clock speeds reach several gigahertz and power fluctuations occur faster than MLCCs can physically correct. As AI chips process surging volumes of data, their power draw has risen sharply, raising the risk that momentary voltage swings degrade performance or cause errors — the gap silicon capacitors are designed to fill.
Samsung Electro-Mechanics runs the business on a fabless model, performing chip design and testing in-house while outsourcing wafer production to foundries in Taiwan and elsewhere. The structure allows margins in the 30 percent range without the burden of large capital expenditure on manufacturing facilities. DB Securities cited the silicon capacitor revenue alongside detected price increases for the company's mainstay MLCCs as the basis for its estimate upgrade.
KB Securities analyst Lee Chang-min said embedded substrates — in which silicon capacitors are built directly into packaging boards — are a product unique to Samsung Electro-Mechanics and stand to benefit strongly from the AI super-cycle. Daol analyst Kim Yeon-mi described the company as the only global player holding both top-tier flip-chip ball grid array, or FC-BGA, substrate capability and ultra-fine capacitor technology, an advantage she said would persist as the company adds customers. FC-BGA substrates are high-end boards that connect advanced processors to circuit boards, a segment Samsung Electro-Mechanics also supplies for AI chips.
The deal lands as Samsung Electro-Mechanics pivots its portfolio toward higher-margin AI components and away from legacy products, a shift brokerages expect to accelerate through the second half of the year as MLCC shortages and price increases coincide with the ramp-up of the new silicon capacitor business.
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