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On July 31, the company announced a consolidated operating profit of KRW 208.1 billion, a 1.5% increase year-on-year, with sales reaching KRW 2.58 trillion (approximately 13.67 billion yuan or $1.89 billion), up 16.2% from the previous year. These results surpassed market expectations of KRW 2.3791 trillion in sales and KRW 207.8 billion in operating profit.

Despite a seasonal downturn causing a 2% decline in sales compared to the previous quarter, the year-on-year growth was supported by increased sales of high-performance semiconductor package substrates, including industrial and automotive MLCCs and server substrates.

In Q2, the component business reported sales of KRW 1.16 trillion, up 15% year-on-year. The optics and communication solutions business saw a 19% increase to KRW 920.7 billion, and the package solutions business grew 14% to KRW 499.1 billion.

Looking ahead to Q3, Samsung Electro-Mechanics expects demand for high-performance components to rise with the launch of new flagship smartphones and steady AI market growth. The company plans to expand sales of high-value IT MLCCs and industrial products like high-temperature, high-pressure MLCCs for AI servers. 

Additionally, Samsung Electro-Mechanics anticipates increased demand for large-area, high-layer-count substrates and plans to boost sales of high-value semiconductor substrates like FCBGA (Flip Chip Ball Grid Array) for servers and networks. The company also aims to expand BGA product supply in response to rising demand from AI PCs and flagship smartphones.

Senior VP of the Package Support Team, Hongjin Kim, noted the high entry barrier for large-area, high-layer-count package substrates for servers and AI, with only a few companies, including Samsung Electro-Mechanics, able to meet the demand. He added, "We are currently supplying server substrates to global clients and preparing for mass production of AI accelerator substrates for cloud service providers (CSPs). We will continue to expand the supply of high-value server and AI package substrates in line with customer demand."

FCBGA, used in high-performance computing (HPC) semiconductors for its fast information processing speed, is expected to see growing demand with the AI market expansion. Samsung Electro-Mechanics recently signed a contract with AMD  to supply high-performance substrates (FCBGA) for hyperscale data centers, with mass production already underway. These products are manufactured at the company's Busan facility and its new Vietnam plant, established with an investment of over KRW 1 trillion since 2021. Revenue from FCBGA for AMD began to reflect partially in Q2 and is expected to be fully realized from Q3.

Kim added, "The new Vietnam plant began contributing to sales in Q2, with continuous approvals for products for major clients. We will ensure that the approval and mass production schedule proceeds smoothly to contribute to the improvement of FCBGA performance in the second half of the year."

Editor：Lulu

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