[News] Samsung Electro-Mechanics Secures KRW 1.07 Trillion Long-Term MLCC Supply Deal for AI Servers
Samsung Electro-Mechanics (SEMCO) announced in a regulatory filing on September 1 that it has signed a Long-Term Agreement (LTA) with an undisclosed global tech giant to supply Multi-Layer Ceramic Capacitors (MLCCs) for artificial intelligence servers.
The contract, valued at KRW 1.0722 trillion, runs from January 1, 2027, to December 31, 2027. This marks the single largest MLCC long-term supply agreement in Samsung Electro-Mechanics’ history, representing 9.5% of its consolidated revenue from the previous fiscal year. The customer’s identity remains confidential due to non-disclosure obligations.
MLCCs are critical passive components in electronic systems. The demanding operating environments of AI servers—characterized by high power consumption and significant voltage fluctuations—require MLCCs with superior high-temperature endurance, high stability, and elevated capacitance, limiting the pool of capable high-volume suppliers.
To safeguard hardware delivery timelines for computing infrastructure, global cloud service providers (CSPs) are increasingly securing component capacity via LTAs, which have become standard industry practice.
Since early 2026, SEMCO has finalized multiple long-term supply deals tied to AI hardware. With this KRW 1.07 trillion order included, the company’s publicly disclosed total for AI-related component LTAs has reached KRW 3.32 trillion.
These contracts span silicon capacitors and several AI server MLCC supply deals, serving over ten global technology enterprises. Further LTA negotiations remain ongoing, with additional deals expected to be announced subsequently.
In 2Q26, SEMCO reported consolidated revenue of KRW 3.46 trillion, up 24% YoY, while operating profit surged 107% year-over-year to KRW 440.4 billion, lifting its operating margin to 12.7%. Revenue from the Component Unit, which oversees core MLCC operations, rose to KRW 1.65 trillion, directly boosted by a growing share of high-end AI server and automotive-grade products.
As a primary supplier of AI server MLCCs, SEMCO recently led price increases for OEM and ODM customers for Q4 2026, according to TrendForce research. To suppress lower-margin demand and reallocate capacity toward high-end production lines, SEMCO is raising prices on consumer-grade X5R products by an average of 25% to 30%. Meanwhile, high-end X6S products used in AI servers will see average price adjustments of 10% to 20%, negotiated per customer.
The boom in AI compute capacity continues to drive demand for high-end MLCCs. TrendForce notes that as mid-to-high capacitance consumer orders spill over to other manufacturers, utilization rates are climbing industry-wide. Combined with SEMCO’s price revisions, the MLCC sector has officially entered an upward price cycle. Market attention now centers on whether Japanese peers such as Murata and Taiyo Yuden will follow suit, serving as a key indicator for subsequent price trajectory amid an expanding supply-demand deficit in Q4.
(Photo credit: Samsung Electro-Mechanics)
