Samsung Electro-Mechanics showed an upward trend of more than 2% in early trading on the 29th. As supply and demand tighten, especially for high-spec components used in artificial intelligence (AI) servers, and securities firms analyze that future earnings estimates could be revised upward again, investor interest continues.

On the morning of the 29th, Samsung Electro-Mechanics was trading at 1,530,000 won, up 31,000 won (2.07%) from the previous trading day.

AI Component Supply as Upward Momentum

One factor influencing the stock price is the supply situation for high-value-added AI components. Hana Securities projected that day that Samsung Electro-Mechanics will enter a phase where earnings estimates for 2027-2028 are revised upward again, as price increases in multi-layer ceramic capacitors (MLCC) and flip-chip ball grid arrays (FCBGA) coincide with production capacity expansion. Hana Securities maintained its 'Buy' rating and a target price of 3,000,000 won.

In particular, as demand for high-spec MLCC and FCBGA grows with the expansion of AI servers and data centers, whether the pace of supply expansion can keep up with rising demand is cited as a key variable for future earnings.

1.0702 Trillion Won AI Server MLCC Supply Contract Signed

Samsung Electro-Mechanics is also expanding its supply base for AI server MLCCs. The company announced that on the 1st of this month it signed a supply contract worth approximately 1.0702 trillion won for AI server MLCCs with a major global company. The supply period covers one year in 2027, and Samsung Electro-Mechanics explained that it has signed long-term MLCC supply contracts with about 10 global companies.

Attention on Package Substrate Capacity Expansion in Sejong and Vietnam

Hana Securities also paid attention to the large-scale package substrate capacity expansion. The analysis is that expanding production capacity centered on Sejong and Vietnam could support future revenue growth in high-spec substrates for AI. However, the timing of when increased production capacity from large-scale investment translates into actual revenue and profit, as well as customer demand trends, remain to be confirmed.

Future Variables for the Stock Price

Ultimately, the next variables for Samsung Electro-Mechanics' stock price are expected to be gauged by the extent of MLCC and FCBGA price increases, the sustainability of AI server demand, the timing of when expanded capacity comes online, and the degree of profitability improvement to be confirmed in the third-quarter earnings release.

[This article is an informational piece based on publicly available corporate materials, securities firm analyses, and market data. It does not guarantee the rise or fall of any specific stock, nor does it recommend buying or selling. Securities firms' target prices and earnings forecasts may change depending on market conditions, and responsibility for losses from investment lies with the investor. Some sentences and data compilation used AI, and the final content was reviewed by the editor.]