Record Growth Driven by AI
Samsung Electro-Mechanics closed the July–September quarter with record revenue and sharply higher operating profit, according to The Korea Herald. The Samsung Group company recorded revenue of 3.76 trillion won (approximately $2.81 billion), up 30 percent year on year, while operating profit rose 165 percent to 691 billion won. Compared with the previous quarter, revenue grew 9 percent and operating profit 57 percent, taking the operating margin from 12.7 percent to 18.4 percent.
According to the source, the main driver is demand for components for data centers dedicated to artificial intelligence and growth in the division that produces advanced semiconductor substrates, i.e., the carriers that connect processors to printed circuit boards.
The Weight of the Substrates Division
The Package Solutions division grew the most: revenue rose 58 percent year on year to 939 billion won, with quarterly growth accelerating from 6 percent in the second quarter to 22 percent. According to the article, this division contributed more than half of the group’s sequential revenue increase, thanks to shipments of high-end substrates for server CPUs, AI accelerators, and network equipment.
The components division, the company’s largest, recorded revenue of 1.88 trillion won, up 36 percent year on year, supported by demand for multilayer ceramic capacitors (MLCCs) used in AI servers and power systems. The company expects further growth in MLCC demand, because more powerful AI processors require higher capacitance to stabilize power supply, and intends to expand supplies through long-term contracts. The Optical Solutions division, by contrast, reported revenue of 941.3 billion won, up 3 percent year on year but down 9 percent from the previous quarter.
Investments and Outlook
In September, Samsung Electro-Mechanics announced an investment plan of approximately 6.8 trillion won to expand semiconductor substrate production in South Korea and Vietnam; in the week before publication, according to the source, it had also announced a long-term supply partnership with Nvidia for advanced substrates for AI processors and data center network equipment.
The company expects demand for AI data center components to remain solid in the fourth quarter and plans to increase shipments of advanced substrates for server CPUs and AI accelerators. The actual implementation of the announced investments and the impact of the Nvidia partnership on volumes remain to be verified in upcoming reports.
