Samsung Electro-Mechanics' third-quarter operating profit was 690.9 billion won, up 165.5% from a year earlier. Revenue also grew 30.3% to 3.7633 trillion won, setting a record for a single quarter. This was thanks to strong sales of multilayer ceramic capacitors (MLCCs) and semiconductor package substrates used in AI (artificial intelligence) servers.
Samsung Electro-Mechanics disclosed its consolidated third-quarter results on the 28th. Compared with the previous quarter, the second, revenue rose 8.9% and operating profit 56.9%. As major global tech companies increase investment in AI data centers, more of them are seeking high-value-added electronic components.
Profit exceeded Wall Street expectations. The average brokerage forecast (consensus) compiled by financial information firms was 642.3 billion won, and actual operating profit was 48.6 billion won (7.6%) higher. Revenue, however, fell 1.6% short of the market estimate of 3.8247 trillion won.
By segment, revenue at the Component Solutions division, which handles the MLCC business, jumped 36% from a year earlier to 1.883 trillion won. Products used in AI data centers, including servers, networks and power, led the sales increase. Key to this was that, as the performance of GPUs (graphics processing units) mounted on AI servers rises, demand has grown for MLCCs that are large in capacity but small in size.
The Package Solutions division, which makes semiconductor package substrates, posted revenue of 939 billion won. Its growth rate of 58% was the largest among the three divisions. Deliveries of high-value-added substrates used in data center servers, such as CPUs (central processing units), AI accelerators and networking equipment, increased, and sales of high-performance substrates used in advanced driver assistance systems (ADAS) and autonomous driving also rose.
Revenue at the Optics Solutions division, whose main business is camera modules, rose 3% to 941.3 billion won. It newly began mass production of 200-megapixel folded zoom camera modules, and supply of products for foldable smartphones and of camera modules that a global electric vehicle (EV) maker will use on its next-generation platform also increased. However, revenue fell 9% from the previous quarter.
Samsung Electro-Mechanics expects demand for high-spec products for AI data centers and for automotive components driven by more advanced autonomous driving to continue in the fourth quarter as well. The company plans to respond to long-term supply contracts for AI MLCCs centered on major global big tech customers, while also supplying more of its new high-value-added flip-chip ball grid array (FC-BGA) products used in server CPUs and AI accelerators. It also plans to mass-produce high-definition, slim camera modules for the next flagship smartphones and to expand supply of camera modules for next-generation platforms to EV customers.