Samsung Electro-Mechanics' Suwon campus [Samsung Electro-Mechanics]
Samsung Electro-Mechanics' Suwon campus [Samsung Electro-Mechanics]

Samsung Electro-Mechanics hit the daily price limit during trading Friday, as stronger-than-expected second-quarter earnings and news of long-term supply agreements for AI server multilayer ceramic capacitors (MLCCs) combined to lift investor sentiment.

Samsung Electro-Mechanics was trading at 1.14 million won ($782) as of 9:44 a.m. Friday, up 263,000 won, or 29.92 percent, from the previous session, according to Korea Exchange. The stock opened at 1.13 million won — a gain of 28.33 percent from Thursday's close — before immediately surging to the daily upper limit.

Overnight gains in semiconductor stocks on the New York Stock Exchange, driven by Microsoft's strong earnings, also lifted sentiment across domestic semiconductor-related shares.

Samsung Electro-Mechanics' second-quarter results also surpassed market expectations. On a consolidated basis, the company posted sales of 3.46 trillion won and operating profit of 440.4 billion won, up 24 percent and 107 percent, respectively, from a year earlier. Both figures exceeded the market consensus compiled by financial data provider FnGuide — sales of 3.32 trillion won and operating profit of 413.9 billion won — marking what analysts called an earnings surprise.

At its earnings call Thursday, Samsung Electro-Mechanics said it had signed long-term supply agreements with about 10 customers, including global hyperscalers and major semiconductor companies. Analysts attributed the deals to customers moving proactively to secure supply as demand for high-performance MLCCs for AI accelerators and servers grows rapidly.

Securities firms expect Samsung Electro-Mechanics' earnings momentum to continue, supported by expanding investment in AI server infrastructure. "The number of suppliers capable of meeting demand for AI server MLCCs is limited, and Samsung Electro-Mechanics has signed long-term supply contracts with about 10 major hyperscalers and semiconductor companies, with additional deals in the works," said Choi Bo-young, an analyst at Kyobo Securities. "For flip-chip ball grid array (FC-BGA) substrates as well, mass production of new products for major tech companies and price adjustments are expected to drive further earnings improvement," she added.

Yang Seung-su, an analyst at Meritz Securities, said Samsung Electro-Mechanics' projected third-quarter operating profit of 601 billion won would exceed the market consensus of 495.5 billion won by more than 20 percent. "Driven by AI-centered demand growth, MLCC shipment increases and high utilization rates are expected to continue," he said.


hajun825@heraldcorp.com