Foreign investors sell Samsung Electronics and buy Samsung Electro-Mechanics: What changed their minds?

In the domestic stock market, foreign investors have recently continued to sell large-cap stocks, but one particular name has shown the opposite trend. Samsung Electro-Mechanics emerged as the stock most heavily bought by foreign investors, drawing attention to the reasons behind this move, Financial News reported.
According to the Korea Exchange (KRX) on the 4th, Samsung Electro-Mechanics ranked first in net purchases by foreign investors over the past week from March 30 to April 3, with a total net buy of 180.8 billion won. It was followed by Hanwha Aerospace at 155.7 billion won, Hyundai Rotem at 126.6 billion won, Samsung SDI at 107.2 billion won, and Sam Chun Dang Pharm also at 107.2 billion won.
During the same period, securities firms raised their target prices for Samsung Electro-Mechanics across the board, leading to a reassessment of the stock’s investment appeal.
Market data provider FnGuide reported that from March 26 through the previous day, major brokerages collectively lifted their target prices for Samsung Electro-Mechanics. NH Investment & Securities and SK Securities each set a target of 600,000 won, while Eugene Investment & Securities suggested 590,000 won. Hyundai Motor Securities (540,000 won), Mirae Asset Securities (530,000 won), and Yuanta Securities Korea (550,000 won) also raised their targets in succession.
The main basis for these upward revisions is a structural increase in demand driven by the expansion of artificial intelligence (AI) infrastructure.
Hwang Ji-hyun, analyst at NH Investment & Securities, noted, "As AI infrastructure becomes more advanced, the number of chips is structurally increasing, and this in turn is driving up demand for Flip Chip-Ball Grid Array (FC-BGA) substrates." Hwang added, "There is a possibility that the timing of FC-BGA supply to new customers will be brought forward."
The report particularly highlighted that under the Split-to-Scale architecture, the increase in chip count directly translates into greater demand for FC-BGA substrates.
Park Hyung-woo, researcher at SK Securities, observed, "Orders for multilayer ceramic capacitors (MLCC) have been rising since the beginning of the year, FCBGA utilization rates are climbing, and the ASP (average selling price) of key components is also moving up." Park assessed, "FC-BGA utilization is rapidly approaching full capacity."
Park went on to stress the company’s technological edge, saying, "Samsung Electro-Mechanics is capable of embedding customized passive components inside high-density package substrates."
Lee Joo-hyung, research analyst at Eugene Investment & Securities, commented, "The high-value MLCC market for AI servers is effectively an oligopoly, and there is strong rationale to believe that price increases can be sustained."
Jongbae Kim of Hyundai Motor Securities explained, "MLCC utilization remains at a high level, and FC-BGA prices are also in the process of being raised," adding, "We are in a phase where supply-demand imbalances and price hikes are occurring at the same time."


dschoi@fnnews.com Choi Doo-seon Reporter