Samsung Electro Mechanics (009150.KS) 8 key takeaways from U.S. NDR AI providing a significant tailwind to MLCC and ABF; Buy

Equity Research 13 September 2026 | 1:12PM SGT

Samsung Electro-Mechanics (009150.KS): 8 key takeaways from U.S. NDR: AI providing a significant tailwind to MLCC and ABF; Buy

We hosted investor meetings with Samsung Electro-Mechanics (SEMCO) in the U.S. Giuni Lee | and provide key takeaways in this report. The main takeaways include: 1) 3Q26 Goldman Sachs (Singapore) Pte

guidance maintained, implying outlook for core fundamentals have actually Taeyong Lee | improved, 2) Tight supply leading to favorable MLCC pricing trends, 3) Substantial Goldman Sachs (Asia) L.L.C., Seoul Branch portion of MLCC revenue to be covered by LTAs, 4) AI datacenter MLCC revenue mix could reach 40% by 2028, 5) Higher AI mix to provide significant tailwinds to MLCC Daiki Takayama | margin, 6) Silicon capacitors another potential long-term growth driver, 7) AI also a Goldman Sachs Japan Co., Ltd. strong tailwind for ABF substrates, and 8) ABF tightness potentially more severe than MLCC; longer LTAs are being signed. We reiterate our Buy rating on SEMCO.

8 Key NDR takeaways n 3Q26 guidance maintained, implying outlook for core fundamentals have actually improved: Despite the unfavorable F/X during the quarter thus far where the KRW has appreciated against the USD by around ~13% QTD, SEMCO maintained its revenue/OP guidance for the quarter, which we believe implies that its outlook for the core fundamentals has actually improved. The company believes the strength of its core fundamentals comes from both MLCC and substrate businesses, where for the former it expects revenue increase of high-teens% qoq with ~20% OPM, and the latter to see a 20% qoq revenue growth with ~20% OPM as well for 3Q26. n Tight supply leading to favorable MLCC pricing trends: Given the tight supply in the market, SEMCO has already raised pricing for the MLCC sold to the distributors two times this year, where this segment comprises around 10% of its MLCC revenue. For the rest of its revenue which are coming from direct customers, the company is currently discussing for a potential pricing adjustment, for which the outcome will likely be decided soon. n Substantial portion of MLCC revenue to be covered by LTAs: Customers are increasingly having concerns on MLCC supply, with certain mobile customers even starting to worry about a potential supply shortage for the next 2-3 years. As a result, customers are securing volume in advance and an increasing number of long-term agreements (LTA) are being signed. SEMCO expects around 60% of its MLCC revenue to be covered by LTAs next year, where the typical duration would be one year, with some customers requiring longer duration. Volume would be guaranteed under these LTAs, while pricing would be adjustable

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Goldman Sachs Samsung Electro-Mechanics (009150.KS)

depending on the market situation, based on a reference pricing. n AI datacenter MLCC revenue mix could reach 40% by 2028: With a significant increase in MLCC content as well as the meaningfully higher pricing premium in AI servers, SEMCO believes that the AI data center MLCC market could grow 70-80% this year, while it expects its AI MLCC revenue to outgrow the market at around 100% yoy growth, and expects growth rate to accelerate next year. As such, the company expects AI portion within its MLCC revenue to reach close to 20% this year, increase to more than 30% next year, and could rise to ~40% in two years. n Higher AI mix to provide significant tailwinds to MLCC margin: While SEMCO’s overall MLCC OPM is currently around 20%, the company mentioned that its AI data center MLCC OPM is around 30%, while margin for specific high-end products would be even closer to…