"Samsung Electro-Mechanics Sees Accelerated Earnings Growth on MLCC and FCBGA Price Hikes" [Click e-Stock]
On September 2, DB Financial Investment stated that the outlook for Samsung Electro-Mechanics’ performance growth is accelerating, citing the price increases of multilayer ceramic capacitors (MLCC) and flip-chip ball grid array (FCBGA) as notable drivers. Accordingly, DB Financial Investment raised its target price for Samsung Electro-Mechanics from 1.5 million won to 2 million won, while maintaining its 'Buy' recommendation.
!["Samsung Electro-Mechanics Sees Accelerated Earnings Growth on MLCC and FCBGA Price Hikes" [Click e-Stock]](http://www.asiae.co.kr/news/img_view.htm?img=2026083116044699407_1788159886.jpg)
Hyunji Cho, an analyst at DB Financial Investment, explained in a report released on this day, “The average MLCC price supplied to IT distribution channels is being raised by about 30%, and direct sales to IT clients are undergoing individual negotiations for similar increases since June. For data center clients as well, negotiations for an approximately 20% price increase are in progress, resulting in long-term supply agreements (LTA) being signed at more favorable prices than current delivery rates.” Cho added, “As of the end of June, the value of new capacitor orders for Japan’s Murata and Taiyo Yuden reached record highs once again, further supporting robust market conditions.”
The FCBGA business is also rapidly shifting toward higher value-added products. Cho commented, “For FCBGA, proactive price increases began with product lines that have relatively lower added value. Given that the proportion of server-grade products within FCBGA is expected to rise from 60% this year to nearly 70% next year, the contribution to the company’s results is likely to become steeper.”
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Cho further noted, “Even taking into account the recent downward trend in exchange rates, third-quarter operating profit is expected to meet market consensus. Beyond simple supply-demand imbalances, there is significant meaning in the fact that bargaining power has now shifted to suppliers. As a result, there remains potential for further upward revisions to next year's estimates.”
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