Samsung Electro-Mechanics, 2024 Q3 Performance
- ▶ Achieved revenue of KRW 2.6153 trillion, and operating income of KRW 224.9 billion
- - Revenue increased by 11% YoY, operating income increased by 20% YoY
- ▶ Increase in supply of high-value added products including AI, automotive, server
- - Performance driven by MLCC/FCBGA for AI/server, MLCC/camera module for automotive, etc.
- - AI server MLCC revenue among the industry leaders, with AI/server FCBGA experiencing a twofold increase YoY
- ▶ A slowdown in component demand is expected in Q4 due to year-end seasonality
- - Promoting supply expansion with a focus on high-value added markets such as automotive and AI, server, etc.
On October 29, Samsung Electro-Mechanics announced that it posted revenue of KRW 2.6153 trillion and operating income of KRW 224.9 billion on a consolidated basis in the third quarter of 2024.
Samsung Electro-Mechanics gained a revenue increase of KRW 258.6 billion (11%) YoY and an operating income increase of KRW 36.8 billion (20%) YoY. Also, its revenue had increased KRW 42.7 billion (2%) QoQ and its operating income had increased KRW 13.4 billion (6%) QoQ.
Samsung Electro-Mechanics explained that its performance improved YoY and QoQ due to increased supply of high-value added products such as MLCCs for AI, cameral modules for automotive, and semiconductor package substrates for servers, etc. driven by market growth in AI, automotive, and server.
As for the fourth quarter, Samsung Electro-Mechanics expects a decrease in revenue of certain products due to a drop in demand for components due to year-end seasonality. However, demand for high-performance products such as AI, automotive, and servers is anticipated to continue growing.
As such, Samsung Electro-Mechanics has established plans to reinforce its product competitiveness and line-ups with a shift in focus from IT products to high value-added products such as automotive and industrial products.
Quarterly Performance of Samsung Electro-Mechanics
(Unit: KRW 100 million)
Performances and Forecasts for the Respective Business Units
The component Unit recorded Q3 revenue of KRW 1.197 trillion, up 9% YoY and up 3% QoQ. This increase in MLCC supply is centered around high-value added products such as industrial and automotive MLCCs for AI, servers, and networks.
In the fourth quarter, a slowdown in MLCC demand is expected due to year-end inventory adjustments. However, Samsung Electro-Mechanics plans to expand its lineup of automotive MLCCs for high-temperature and high-pressure applications, while strengthening sales of high-value added products including compact and high-capacity products for IT. In particular, Samsung Electro-Mechanics is maintaining its position as a leader in MLCC sales for AI servers, with related revenue expected to more than double YoY.
The Optics & Communication Solution Unit recorded Q3 revenue of KRW 860.1 billion, up 5% YoY. The supply of high-performance camera modules for new smartphones targeted at strategic customers and the supply of automotive camera modules targeted at global customers have increased.
Samsung Electro-Mechanics has a plan to promptly respond to the high-performance camera module demands including high-resolution folded zoom, and proactively pursue the supply expansion of automotive products such as all-season weather proof camera modules, and client diversification
The Package Solution Unit recorded Q3 revenue of KRW 558.2 billion, up 27% YoY and up 12% QoQ, due to the increase in demand for high-value added products. Samsung Electro-Mechanics is expanding the supply of BGA for ARM CPUs, and there has been an increase in the sales of large-area, multi-layer FCBGA substrates for AI, server, and automotive. In particular, FCBGA for AI and servers is expected to grow by about twofold this year compared to last year, primarily driven by CPUs.
As for the fourth quarter, demand for high-value added substrates in AI, servers, networks, and automotive applications is expected to continue increasing. Samsung Electro-Mechanics plans to increase the supply of FCBGA for servers and expand the share of high-value added products such as FCBGA for AI accelerators. Additionally, Samsung Electro-Mechanics aims to ensure stable production at its new factory in Vietnam, which began mass production in Q2, to continue growing its high-end packaging substrate business.
Earnings by each Business Unit of Samsung Electro-Mechanics
(Unit: KRW 100 million)