Samsung Electro-Mechanics, which surged more than 700% this year to rank among the top KOSPI stocks by market capitalization, plunged for a second consecutive trading day. Analysts attributed the decline to profit-taking after the short-term rally, but anxiety is mounting among retail investors who bought near the peak.
Shares of Samsung Electro-Mechanics closed at 1.813 million won on the main bourse Tuesday, down 9.58% from the previous trading day. The stock opened more than 8% lower and at one point in the morning fell as much as 17%, sliding to around 1.65 million won.
The company joined the ranks of so-called "emperor stocks" — those trading above 1 million won per share — after surpassing that threshold on November 20. It then climbed to 2.12 million won within seven trading sessions, a gain of 115.5%. During the rally, it overtook Hyundai Motor to become the fourth-largest stock on the KOSPI by market capitalization.
The surge proved short-lived. Samsung Electro-Mechanics fell 5.74% on Monday, dropping back below 2 million won, and lost more than 9% on Tuesday, bringing its two-day decline to 14.7%. Its market capitalization ranking slipped to sixth.
The stock, which traded in the 200,000 won range early this year, was rerated as an AI components play and rose rapidly. As of its closing above 2 million won on November 29, its year-to-date gain stood at 734.1%.
The rally has been driven by expectations for the company's MLCC (multi-layer ceramic capacitor) and substrate businesses. MLCCs, often called "the rice of the electronics industry," are drawing renewed attention as a core component amid expanding demand for AI servers and high-performance semiconductors. Visibility on an MLCC price-hike cycle also fueled expectations of improved profitability, lifting the stock.
Brokerages view the latest drop as profit-taking after a short-term overheating. Related stocks have risen rapidly amid the AI semiconductor rally, and analysts said market expectations were excessively priced in around the moves of Nvidia CEO Jensen Huang. A "sell-the-news" flow ahead of Wednesday's market closure for local elections also weighed on the shares, analysts said.
Even so, brokerages are raising their price targets for the stock. DB Financial Investment lifted its target price for Samsung Electro-Mechanics to 3 million won from 1.6 million won the previous day.
"Samsung Electro-Mechanics, which holds top-tier technology in FC-BGA (flip-chip ball grid array) and MLCC, occupies an irreplaceable position," DB Financial Investment analyst Cho Hyun-ji said. "The current industry conditions are unprecedented, with volume visibility secured through beyond 2028."
Mirae Asset Securities also presented a target price of 2.8 million won for Samsung Electro-Mechanics on Tuesday. "A structural growth phase has begun for AI servers, FC-BGA, and the capacitor business," Mirae Asset Securities analyst Park Jun-seo said. "On top of that, we forecast that the average selling price (ASP) of substrates will rise 20% and MLCC ASPs 10% from 2027."
