Samsung Electro-Mechanics is benefiting from expectations of earnings growth driven by a supply shortage in the AI server substrate market. However, its stock price closed slightly lower on the day.

On the KOSDAQ market on the 10th, Samsung Electro-Mechanics closed at 1,275,000 won, down 3,000 won (0.23%) from the previous trading day.

KB Securities projected that as the supply shortage for AI server substrates deepens, the earnings growth trend of Samsung Electro-Mechanics and LG Innotek will continue. Citing reduced valuation burdens following recent stock price corrections, the firm designated both companies as top picks in the electrical and electronics sector.

In a recent report, KB Securities noted that substrate manufacturers' strong second-quarter performance is being accompanied by continued upward revisions in second-half earnings forecasts. In particular, the firm analyzed that the recent repeated sharp stock price corrections need to be viewed from a mid- to long-term perspective.

The expansion of the AI server market is leading to increased demand not only for high-performance semiconductors but also for the high-specification substrates that connect and support them. As data processing volumes surge rapidly, the performance and density requirements for substrates used in servers are also on the rise. Analysts note that if substrate supply fails to keep pace with the rate of demand growth, it could create a favorable environment for substrate manufacturers' earnings in terms of product pricing and capacity utilization.

For Samsung Electro-Mechanics, the expansion of high-value-added product groups such as AI and server applications is expected to be a key variable in determining future earnings trends. Market attention is increasingly focusing on the supply and demand dynamics for AI server substrates and changes in second-half earnings forecasts, irrespective of short-term stock price fluctuations.

[※ This article is for informational purposes only and does not recommend the purchase or sale of any specific stock. Stock investing carries the risk of principal loss depending on market conditions and corporate performance. This article was written with AI assistance.]