Yuanta Securities has raised its target price for Samsung Electro-Mechanics to 2.2 million won. The firm anticipates significant improvements in performance as both the multilayer ceramic capacitor (MLCC) and FC-BGA businesses enter a boom phase.
Go Sun-young, an analyst at Yuanta Securities, stated, "The supply shortage of MLCCs for AI servers is leading to price increases for general-purpose products," adding that the firm has revised its operating profit estimates for 2026 and 2027 upward.
Go analyzed that the high backlog of orders (BB Ratio) from competitors, the expansion of long-term supply contracts (LTA), and extended supply lead times indicate a strong likelihood of MLCC price increases. With the surge in demand for high-value products for AI servers, the supply capacity for general-purpose products is diminishing, which is expected to enhance pricing power for server-oriented products in the future.
The silicon capacitor business is also identified as a new growth driver. Go noted that the spread of chiplet architecture related to Intel's EMIB-T technology is driving an increase in capacitor demand, predicting that related orders will continue alongside the expansion of the CPU market. The FC-BGA segment is also expected to see profitability improvements as both price increases and production capacity expansions occur simultaneously.
He explained, "The situation where supply increases cannot keep pace with demand for both MLCC and FC-BGA will continue until after 2028," adding that a phase is emerging where both price (P) and quantity (Q) are improving once supply is secured.
He concluded, "Samsung Electro-Mechanics is the only global company experiencing simultaneous upcycles in both MLCC and FC-BGA. Considering the high visibility of performance based on long-term supply contracts, we are raising the target price to 2.2 million won."
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.