Samsung Electro-Mechanics' FC-BGA line investment estimated at at least KRW 9 trillion

[Financial News] On the 7th, Daol Investment & Securities estimated that Samsung Electro-Mechanics' investment in FC-BGA lines would amount to at least 9 trillion won in actual terms. The disclosed amount is 6.8 trillion won. Daol Investment & Securities raised its investment rating on Samsung Electro-Mechanics to “Buy” and its target price from 1.6 million won to 2.6 million won.
Jo Dae-hyeong, an analyst at Daol Investment & Securities, explained: “The large-scale investment in FC-BGA lines also demonstrates that business conditions for ABF substrates are favorable. About 80% of the investment is believed to take the form of customer support payments, and prices continue to rise each quarter. The capacity-absorption effect is also expected to intensify as production of large-area products such as high-performance CPUs increases. We believe the market is at the beginning of a supplier-favorable phase, and expect profitability to improve sharply each quarter.”
Jo said: “Amid the capacity-absorption effect from the growing share of high-value-added MLCCs, customers’ demand to secure volumes in advance is being borne out by the signing of long-term supply contracts. An additional contract worth 285.6 billion won was signed on the 6th, bringing the value of MLCC long-term supply contracts secured to date to about 2.4 trillion won. Further contracts are also likely. In the second half, sequential price increases for customers that purchase MLCCs directly may also be expected, and we expect earnings growth to continue in the fourth quarter.”
Accordingly, Daol Investment & Securities said it had raised its operating profit estimates for Samsung Electro-Mechanics in 2026 and 2027 by 6.7% and 23.7%, respectively, from previous estimates, to 2.1062 trillion won and 3.8362 trillion won.
[email protected] Kang Gu-gwi Reporter