Samsung Electro-Mechanics Secures Largest-Ever MLCC Order

2026-09-07

South Korean passive component leader Samsung Electro-Mechanics has announced the signing of a Long-Term Supply Agreement (LTA) for AI server Multi-Layer Ceramic Capacitors (MLCCs) with a globally renowned technology company. Valued at approximately 1.0722 trillion won, this marks the largest MLCC supply contract in the company's history, equivalent to 9.5% of its consolidated revenue from the previous fiscal year, with the delivery period locked in for the entirety of 2027.

LTA Orders

Since May this year, Samsung Electro-Mechanics has intensively signed multiple long-term agreements for AI-related components, with cumulative disclosed amounts reaching 3.32 trillion won. Specifically, in May the company announced a silicon capacitor (Si-Cap) supply contract worth approximately 1.5 trillion won with a two-year term; in June and July it signed one-year MLCC contracts worth approximately 454 billion won and 300 billion won respectively. Combined with this latest MLCC order of 1.0722 trillion won, all four contracts will take effect from 2027.

To date, Samsung Electro-Mechanics has signed MLCC long-term supply agreements with more than ten major global enterprises, and is continuing to advance negotiations for new LTAs with multiple customers. As procurement volumes for 2027 are successively finalized, additional contract announcements are expected to follow.

Price Hikes and Capacity Expansion

Samsung Electro-Mechanics Secures Largest-Ever MLCC Order

AI servers demand MLCCs at an intensity far exceeding that of traditional servers. Due to the dense deployment of high-performance semiconductors such as GPUs and HBM, a single AI server requires approximately ten times the MLCC quantity of a conventional server. Furthermore, these components must operate continuously 24 hours a day in high-temperature, high-voltage environments, imposing extremely stringent requirements on capacitance, thermal endurance, robustness, and long-term reliability—meaning only a limited number of manufacturers can supply at scale.

Samsung Electro-Mechanics implemented a uniform 30% price increase across its entire MLCC product line on August 1. Japanese major Taiyo Yuden followed suit with price adjustments on September 1, candidly stating that even after the increases, guaranteeing on-time delivery remains difficult. To accommodate the surge in new orders, Samsung Electro-Mechanics' Calamba plant in the Philippines will commence capacity expansion from 2027, while its Busan facility in South Korea is being transformed into a main production line and R&D base for high-value-added MLCCs, with cumulative investment in Busan planned to reach approximately 15 trillion won by 2040.

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