Samsung Electro-Mechanics (009150.KS) hit a record high on the Korea Exchange on Thursday, driven by expectations that its competitiveness in the AI chip substrate market will elevate its status within the Nvidia ecosystem.
102% Surge in Three Months as Company Becomes Nvidia First Vendor
Samsung Electro-Mechanics closed at 565,000 won, up 9.50%, setting a new all-time high, according to financial industry data on Thursday. The stock began its upward trajectory in mid-2024 and has accelerated since February this year, with cumulative gains of 102.51% over the past three months.
The rally is attributed to the company's strengthening position in Nvidia's supply chain. Samsung Electro-Mechanics has reportedly been selected as the FC-BGA (flip-chip ball grid array) supplier for Nvidia's next-generation AI accelerator Grok 3 LPU, with mass production expected to begin as early as the second quarter.
Following its entry into the supply chain with FC-BGA for NV Switch chips, the company has now secured first vendor status for the Grok 3 LPU, industry sources said. The industry expects this will significantly expand Samsung Electro-Mechanics' role within Nvidia's AI semiconductor ecosystem.
MLCC Price Hikes a Tailwind; Brokerages Set Target Price at 700,000 Won
Securities analysts largely expect operating profit to surge this year as supply chain inclusion coincides with rising prices for high-value components.
Estimates suggest that a 10% increase in MLCC prices could improve operating profit by 600 billion won. Japan's Murata, the global MLCC market leader, discussed price increases in February, drawing industry attention.
According to FnGuide, consensus forecasts for Samsung Electro-Mechanics project operating profit of 1.4 trillion won and revenue of 12.87 trillion won this year. If achieved, this would mark the company's return to the 1 trillion won operating profit threshold for the first time in five years since 2021.
Meritz Securities raised its target price to 700,000 won, stating, "The company has already secured world-class competitiveness in the ABF substrate market and is the only substrate maker with passive component supply capabilities."
Shinhan Investment Corp. also set a target price at the same level, noting, "Amid a favorable substrate market environment, expectations are growing for expanded high-value product sales and rising supply prices. The company has entered a valuation re-rating phase alongside global peers."