Samsung Electro-Mechanics reported record quarterly revenue and operating profit Wednesday, driven by strong demand for artificial intelligence data center components and accelerating growth in its semiconductor substrate business.
The Samsung Group affiliate posted revenue of 3.76 trillion won ($2.81 billion) in the July-September period, up 30 percent from a year earlier, while operating profit surged 165 percent to 691 billion won.
Revenue rose 9 percent from the previous quarter, but operating profit jumped 57 percent, lifting the company's operating margin to 18.4 percent from 12.7 percent in the April-June period.
The strongest growth came from its package solutions division, which produces advanced substrates connecting processors to circuit boards.
Revenue from the division surged 58 percent year-on-year to 939 billion won, with quarterly growth accelerating to 22 percent from 6 percent in the second quarter. The division accounted for more than half of the company's sequential revenue increase, supported by shipments of high-value substrates for server CPUs, AI accelerators and networking equipment.
In September, Samsung Electro-Mechanics announced plans to invest approximately 6.8 trillion won in expanding semiconductor substrate production in South Korea and Vietnam. The company also announced a long-term supply partnership with Nvidia last week for advanced substrates used in AI processors and data center networking equipment.
Its components division, the company's largest business, posted revenue of 1.88 trillion won, up 36 percent year-on-year, on increased demand for multilayer ceramic capacitors, or MLCCs, used in AI servers and power systems.
Samsung Electro-Mechanics expects MLCC demand to grow further, as more powerful AI processors require higher capacitance, the ability to store electrical charge, to stabilize their power supply. It plans to expand supplies of advanced MLCCs under long-term contracts with major technology customers.
Revenue from its optical solutions division rose 3 percent year-on-year to 941.3 billion won, although it declined 9 percent from the previous quarter.
The company expects demand for AI data center components to remain strong in the fourth quarter and plans to increase shipments of advanced substrates for server CPUs and AI accelerators.
mjh@heraldcorp.com
