SAMSUNG ELECTRO-MECHANICS

On July 26, Samsung Electro-Mechanics announced that it posted revenue of KRW 2.2205 trillion and operating income of KRW 205 billion on a consolidated basis in the second quarter of 2023.

In the second quarter, revenue increased by KRW 198.7 billion (10%) and operating income increased by KRW 64.9 billion (46%) QoQ thanks to increased sales of MLCCs and semiconductor substrates for mobile devices (BGAs) and expansion of supply for automotive products such as camera modules and MLCCs for Chinese clients. Revenue decreased by KRW 235.1 billion (10%) and operating income decreased by KRW 155.1 billion (43%) YoY due to lower demand for IT.

In the second half of the year, demand recovery for some sets is expected to be delayed due to effects such as the global economic slowdown, but demand for related components is expected to increase due to the launch of new smartphone flagship models, reduction in inventory of key components, and continued growth in market demand for automotive products.

Samsung Electro-Mechanics plans to strengthen the foundation for mid-to-long-term growth by increasing the proportion of high-value-added products such as high-end MLCCs and high-end camera modules for flagship devices, as well as automotive and server products.

Quarterly Performances of Samsung Electro-Mechanics 

(Unit: KRW 100 million)

Performances and Forecasts for the Respective Business Units 

The Component Unit recorded Q2 revenue of KRW 1.0065 trillion, up 22% QoQ. Earnings improved QoQ thanks to the launch of new Chinese smartphone models and increased supply of automotive and industrial products.

In the third quarter, demand for MLCCs is expected to increase, driven by rising demand in the IT market and an expected expansion of the automotive product market. Samsung Electro-Mechanics plans to actively respond to market demand by increasing the rate of operation for small and high-capacity MLCCs for IT and expanding the supply of high-reliability automotive MLCCs.

The Optics & Communication Solution Unit posted revenue of KRW 776.6 billion, down 3% QoQ.Samsung Electro-Mechanics said that while the demand for flagship models of key clients decreased due to the seasonal off-season, the supply of high-resolution camera modules such as folded zoom and automotive camera modules for Chinese clients increased.

Although the overall smartphone market is expected to remain weak in the third quarter, Samsung Electro-Mechanics plans to expand the supply of high-end products according to the launch of new smartphone models by strategic clients and actively respond to the automotive market also.

The Package Solution Unit posted Q2 revenue of KRW 437.4 billion, up 10% QoQ, driven by the expansion of supply focused on high value-added products such as BGAs for mobile APs and ARM processors, and FCBGAs for servers and automotive products.

In the third quarter, Samsung Electro-Mechanics is expecting to expand its supply of BGAs in response to the release of new models by major smartphone clients. In addition, demand for FCBGAs for PC products is expected to remain weak, while demand for server and automotive products is expected to remain solid.

Earnings by each Business Unit of Samsung Electro-Mechanics 

(Unit: KRW 100 million)