There Was a Real "Money-Making Machine" Soaring 538%... A Large-Cap Stock Outperformed Samsung and SK hynix

Samsung Electro-Mechanics Surges Over 500% This Year
MLCC and Substrate Businesses Face Supply Shortages Amid AI Boom
Power Equipment Makers Like LS ELECTRIC Also Enjoy a Boom

As the KOSPI surpassed 8,000 to reach an all-time high, some large-cap stocks have soared more than 500% this year, significantly outperforming the returns of Samsung Electronics and SK hynix.

Samsung Electro-Mechanics Suwon Plant Exterior View

MLCC Supply Shortage... Samsung Electro-Mechanics Soars Over 500% This Year

According to the Korea Exchange on May 28, Samsung Electro-Mechanics recorded a year-to-date share price increase of 538% through the previous day, ranking first among major companies by market capitalization. This far surpasses the returns of Samsung Electronics (155%) and SK hynix (244%).

Samsung Electro-Mechanics focuses on multilayer ceramic capacitors (MLCC), essential components for artificial intelligence (AI) semiconductors, and substrates. The securities industry expects that surging demand for AI semiconductors will continue to drive shortages in both MLCCs and substrates, resulting in ongoing price increases. Consequently, target prices have been repeatedly raised.

Shinhan Investment & Securities stated, "The MLCC and substrate divisions are emerging as core parts of the AI value chain," and raised its target price for Samsung Electro-Mechanics from 1 million won to 2 million won as of the previous day. SK Securities also raised its target price for Samsung Electro-Mechanics from 1.5 million won to 2 million won, citing anticipated improvements in performance driven by future MLCC price increases.

Park Hyungwoo, a researcher at SK Securities, emphasized, "Samsung Electro-Mechanics is the only global component maker that independently produces both MLCCs and FC-BGA (flip chip ball grid arrays), and the synergy created when these two product lines are integrated within a single company differentiates it from other component makers." The share price of Samsung Electro-Mechanics, which was around 250,000 won at the beginning of the year, has recently climbed to 1.7 million won.

Samsung Electro-Mechanics' competitor, LG Innotek, also saw its share price surge 285% this year, reaching 1 million won and joining the ranks of 'emperor stocks.' Hana Securities raised its target price for LG Innotek from 700,000 won to 1.3 million won, stating that all business divisions are expected to improve their performance. Kim Minkyoung, a researcher at Hana Securities, emphasized, "While profitability of BT (bismaleimide triazine) substrates is improving due to customer base expansion and substrate specification upgrades, the company has also secured a multiple rerating factor by initiating server-targeted FC-BGA supply in 2027."

The recent sharp rise in the stock price of Murata Manufacturing, the global leader in MLCC market share based in Japan, also contributed to the stock price gains of Samsung Electro-Mechanics and LG Innotek. Murata announced that, despite large-scale capacity expansions to address the shortage of high-value-added MLCCs, supply shortages are expected to persist.

LS ELECTRIC Jumps 181% Amid Power Device Boom

The trickle-down effect of the AI boom is not limited to component manufacturers. LS ELECTRIC drew attention as a major beneficiary of soaring demand for power devices due to the boom in AI data center construction in the United States, with its share price skyrocketing 181% this year. As AI data centers emerge as "electricity guzzlers," the power infrastructure market—including high-voltage transformers—has been experiencing an unprecedented boom.

Additionally, several blue-chip stocks with special momentum have joined the rally. Mirae Asset Securities surged 177% on expectations surrounding the potential listing of Elon Musk’s space company, SpaceX, while LG Electronics rose 156% on visible results and optimism regarding its robotics business, which is expected to drive future growth.

Amid the massive gains of these large-cap stocks, the Korean stock market this year is exhibiting a highly polarized trend. While the KOSPI index has soared 97% this year, staging a sharp rally, the KOSDAQ index has only managed a 22% increase.

Lee Euntaek, a researcher at KB Securities, commented, "In bull markets, there are often extreme concentrations in market-leading stocks," and predicted, "As the AI rally continues, the concentration phenomenon may become even more pronounced."

This content was produced with the assistance of AI translation services.