Samsung Electro-Mechanics has secured a supply contract for multilayer ceramic capacitors (MLCC) for artificial intelligence (AI) servers, valued at over 1 trillion won ($1.07 billion). This contract marks the largest long-term supply agreement for MLCCs in the company's history. The growing investment in AI data centers is intensifying competition for long-term supply of not only semiconductors but also high-performance electronic components.
On September 1, Samsung Electro-Mechanics announced it had signed a contract for AI server MLCCs worth 1.07 trillion won, effective from January to December 2027. This amount represents approximately 9.5% of the company's consolidated revenue of 11.31 trillion won last year.
The identity of the contracting party has not been disclosed due to confidentiality agreements. However, Samsung's previous supply lines for AI server MLCCs have been primarily centered around major North American tech companies. In June, a contract worth 454 billion won led the market to speculate that it was with a major U.S. cloud service provider, with Amazon Web Services (AWS), Google, and Meta among the potential candidates. Notably, key AI-related clients of Samsung include NVIDIA, AMD, Amazon, and Marvell, although it has not been confirmed if any of these companies are involved in the latest contract.
This new contract significantly surpasses previous orders. Samsung began with a 1.56 trillion won silicon capacitor contract in May, followed by contracts worth 454 billion won in June and 295 billion won in July for AI server MLCCs. With this latest agreement, the total disclosed long-term supply contracts related to AI capacitors now approach 3.32 trillion won.
Analysts in the securities market have suggested that the July contract was likely with a global server assembly company, estimating that the end customer is a different hyperscaler than the one involved in the June contract. The pricing for the same products has also reportedly increased compared to the previous month, indicating that Samsung's negotiating power is growing amid supply shortages.
During a conference call in July regarding its second-quarter results, Samsung Electro-Mechanics stated it had signed long-term supply contracts for MLCCs with over 10 customers, including top hyperscalers and major semiconductor firms. The company also noted that it has received additional contract requests. The shift from short-term orders to long-term contracts for MLCCs suggests that customers are increasingly seeking to secure high-spec products for AI servers in advance.
AI servers require more than ten times the amount of MLCCs compared to standard servers. Particularly, ultra-high-capacity and high-temperature products can only be supplied by a few companies, including Samsung Electro-Mechanics. The operational rate of Samsung's component business is projected to rise to 93% by 2025.
In response to the increasing demand, Samsung Electro-Mechanics is also expanding its production capabilities. In July, the company announced plans to invest approximately 15 trillion won by 2040 to develop its Busan facility into a key production and R&D hub for high-value MLCCs and high-performance package substrates for AI servers. This recent contract, valued in the trillions, demonstrates that the company's transition to AI-focused business is translating into actual sales volumes for 2027.
A representative from Samsung Electro-Mechanics stated, "This contract is a result of global customers recognizing Samsung's technological capabilities and supply stability. We will expand our supply of high-reliability MLCCs for AI servers to secure a strong leadership position in the AI market."
* This article has been translated by AI.
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