[Seoul=Newsdesk] On the 12th, Samsung Electro-Mechanics rose to 1,861,000 won during intraday trading, recording a 3.10% increase compared to the previous day. Expectations of a surge in demand for multi-layer ceramic capacitors (MLCC) due to the rapid expansion of the artificial intelligence (AI) server market are significantly improving investor sentiment.

'Structural Shortage' of MLCC for AI Servers... Meritz Securities Diagnoses it as a 'Strategic Asset' In a recent report, Meritz Securities identified 'ultra-small, ultra-high-capacity MLCCs for AI servers' as a key growth driver for Samsung Electro-Mechanics. MLCCs mounted on AI servers are highly difficult products that require a high number of stacking layers within a limited space, resulting in very high barriers to production technology. The analysis suggests that as there are currently limited companies capable of stably supplying these products in the global market, a structural supply shortage is highly likely to continue.

In particular, as the AI data center and server markets experience rapid growth, major clients are entering a competition to secure core components. The industry evaluates that movements to secure market share through Long-Term Agreements (LTAs) for supply chain stability are fully underway, going beyond simple price negotiations. Meritz Securities diagnosed that as the pace of demand growth outstrips supply expansion, MLCCs have emerged as strategic assets on par with semiconductors, and there is a growing consensus across the value chain regarding the potential deepening of supply shortages.

Despite Middle East Geopolitical Risks... Structural Growth of 'AI Infrastructure' Continues Global financial markets are on high alert due to geopolitical tensions in the Middle East surrounding the United States and Iran. The United States is maintaining its military presence in the Middle East while calibrating its level of pressure, and Iran is continuing its hardline response stance. However, the market is heavily weighing the possibility that both sides will pursue limited conflict alongside diplomatic negotiations rather than an all-out war.

While such Middle East risks could increase short-term volatility in financial markets, they are expected to have a limited impact on the industry's structural growth trend of expanding AI infrastructure investments and augmenting data centers. The securities sector anticipates that the MLCC market for AI servers will continue its high growth trajectory over the next few years, predicting that Samsung Electro-Mechanics, with its capacity to supply core components, will enter a phase of profitability improvement centered on high-value-added products.

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