Samsung Electro-Mechanics Outperforms Samsung Electronics with 31.61% August Gain

Samsung Electro-Mechanics is experiencing a resurgence in its stock price. After reaching an all-time high of 2,417,000 won on June 19, the stock had previously declined but is now on an upward trend. In the past month, it has significantly outperformed its affiliate, Samsung Electronics, driven by strong expectations for increased demand for multilayer ceramic capacitors (MLCC) due to expanded investments in artificial intelligence (AI) servers.

According to the Korea Exchange, Samsung Electro-Mechanics closed at 1,503,000 won on August 13, up 16,800 won (12.58%) from the previous trading day. This marks a 31.6% increase from the end of July, when it was priced at 1,142,000 won. In contrast, Samsung Electronics saw a modest rise of only 2.1%, moving from 262,500 won to 268,000 won during the same period, making Samsung Electro-Mechanics' growth rate approximately 15 times higher.

Analysts attribute the strong performance of Samsung Electro-Mechanics to an improving market for MLCCs. The company collaborates with Japan's Murata Manufacturing to produce high-voltage, high-capacity MLCCs for AI servers. Yuanta Securities noted in a recent report that Samsung Electro-Mechanics is discussing long-term supply agreements (LTAs) to meet the demand for high-performance AI servers and is also exploring ways to expand production capacity using advance payments.

The company's substrate business is also expected to benefit from increased AI investments. Capital expenditures (CapEx) from four major North American tech companies—Google, Amazon, Microsoft, and Meta—are projected to rise by 82.5% in 2026 compared to the previous year, with an additional 35.3% increase expected in 2027.

Additionally, a positive outlook from Morgan Stanley has contributed to the stock's rise. The firm recently upgraded Samsung Electro-Mechanics to its top pick, citing expectations for rising MLCC prices, and raised its target price from 2,560,000 won to 2,620,000 won.

Meanwhile, the KOSPI index closed at 6,813.34, up 3.56% from the previous trading day, buoyed by strong semiconductor stocks. Foreign investors purchased a net 2.1191 trillion won, while institutions bought 680.7 billion won. In contrast, individual investors sold a net 2.7333 trillion won. The KOSDAQ index also rose, closing at 861.37, up 0.29%, marking its fourth consecutive day of gains.