Meritz Securities announced on June 22 that it has raised its target price for Samsung Electro-Mechanics from 2.4 million won to 2.8 million won, citing simultaneous strong performance in the multilayer ceramic capacitor (MLCC) and ABF substrate businesses. The investment recommendation remains at 'Buy.'
Yang Seung-soo, a researcher at Meritz Securities, adjusted the operating profit forecast for next year based on the anticipated rise in average selling prices for MLCCs and ABF substrates. He stated, "Both the MLCC and ABF substrate divisions are experiencing increased demand visibility driven by AI needs, which is expected to continue until 2028. This concurrent upcycle in both sectors will lead to profit growth rates that significantly surpass those of competitors."
Concerns about potential supply shortages for MLCCs and ABF substrates have also emerged. Contrary to initial expectations, prices for general-purpose MLCCs have begun to rise, and the supply shortage of ultra-small and high-capacity MLCCs for AI applications is deepening, increasing the likelihood of further price hikes. Yang noted, "Demand for high-capacity MLCCs is rapidly increasing due to rising AI server needs, but supply expansion remains limited," adding that significant capacity expansions are anticipated to address the supply shortages in ABF substrates.
To meet the growing demand for substrates for AI semiconductors, investments exceeding 5 trillion won are expected this year and next. However, much of this investment will be supported by customer subsidies, limiting the financial burden. Consequently, Meritz Securities forecasts ABF substrate sales to grow to 1.9 trillion won in 2026, 2.7 trillion won in 2027, and 4.2 trillion won in 2028.
* This article has been translated by AI.
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