Key points
- Samsung Electro-Mechanics closed September 4 at 1,401,000 won ($1,037), bringing its 2026 gain to 449.41%
- Samsung Electronics is up 113.09% and SK Hynix 153.00% over the same period
- Second-quarter operating profit more than doubled to 440.4 billion won ($326M) as demand for AI-server components grew
- Even after this year's surge, the shares remain 42% below their 52-week high of 2,417,000 won ($1,790)
Samsung Electro-Mechanics (삼성전기, 009150) closed at 1,401,000 won ($1,037) in Seoul on Friday, September 4, gaining 3.93 percent for the day. Korea Exchange data reported by Herald Economy (헤럴드경제) on Saturday showed the stock up 449.41 percent in 2026, from 255,000 won ($189) at the end of last year. That made it the Kospi's best performer.
Korea's two dominant chip stocks didn't come close. Samsung Electronics is up 113.09 percent this year, which ranks 25th. SK Hynix is up 153.00 percent, which ranks 16th. Samsung Electro-Mechanics is also the only large company in the top ten. The names near it, like Kumho Electric and Gaon Cable, are much smaller.
Samsung Electro-Mechanics is a Samsung affiliate that makes parts, not chips. Its biggest product is the multilayer ceramic capacitor, or MLCC, a tiny ceramic component that steadies the flow of electricity inside a device. It also makes FC-BGA substrates, the layered boards that a processor sits on. The company says data centers and AI servers are where the demand for both is coming from.
Its second-quarter report showed what that looks like. Revenue was 3.457 trillion won ($2.56B) and operating profit was 440.4 billion won ($326M), up 107 percent from a year earlier. The company said the growth came from MLCCs for AI servers and data centers and from FC-BGA substrates for big global technology customers. It has signed long-term MLCC supply contracts with about ten customers, including what it called top-tier hyperscalers, and it said more customers are asking for the same.
One of those contracts became public on September 1. A disclosure put its value at 1.0722 trillion won ($794M), with supply running from January 1 to December 31 of next year. Herald Economy counted three MLCC order disclosures this year, together worth 1.8213 trillion won ($1.35B). The customer was described only as a global big tech company.
Why brokerages keep raising their targets
DB Financial Investment (DB금융투자) raised its target price this week to 2,000,000 won ($1,481) from 1,500,000 won ($1,111), a target about 43 percent above Friday's close. Cho Hyun-ji, an analyst at the firm, wrote that for both MLCC and FC-BGA, "supply constraints from capacity being used up and a technical barrier, with three or fewer stable server-grade suppliers, are clear," and that "the likelihood of further increases in selling prices is judged to be high." Kyobo Securities (교보증권) is at 3,000,000 won ($2,222), the highest level among Korean brokerages and about 114 percent above the close, by our arithmetic.
Park Kang-ho, an analyst at Daishin Securities (대신증권), expects the third quarter to set new records for both revenue and operating profit. Park said that even after allowing for a won that has strengthened about 10 percent, "the reason forecasts come in above previous estimates and market consensus is that the supply shortage of FC-BGA and MLCC, the core AI components, has deepened that much." Daishin estimates third-quarter operating profit of 636.3 billion won ($471M), up 144.5 percent from a year earlier and above the market consensus of 596 billion won ($441M).
The stronger won is one headwind. The company sells to customers around the world and books the money in won, so a stronger won shrinks the same dollar sales, and the won closed at 1,350.4 to the dollar on Friday, its strongest level since June 2025. Others are the price itself, the ups and downs of component demand, dependence on a small group of very large customers, and the work of actually building the capacity those contracts assume.
What the 449 percent leaves out
Start with what the price already assumes. At Friday's close the company is worth about 104.6 trillion won ($77.5B), about 108 times the profit it earned over the past twelve months and about 71 times what analysts expect for this year, according to Naver Finance data. Daishin's own forecast has operating profit reaching 2 trillion won ($1.48B) this year and 3.98 trillion won ($2.95B) in 2028, and even against that 2028 figure the company is valued at about 26 times operating profit today, by our arithmetic. The price already counts on several more years of growth.
The stock hasn't gone up in a straight line either. Its 52-week high was 2,417,000 won ($1,790) during trading on June 19, and Friday's close is 42 percent below that, by our arithmetic. So the best stock on the Kospi this year has also lost more than two-fifths of its value from its peak, inside the same year.
On Friday, foreign investors bought a net 141,281 shares and institutions a net 61,273, while individual investors sold a net 201,764, according to Korea Exchange investor data. That reversed three straight sessions in which foreigners had been net sellers, while individual investors, net buyers on two of those three sessions, were sellers on Friday.
Meanwhile, the rally reached both classes of the stock. The company's non-voting preferred shares (삼성전기우) rose 331.90 percent this year, from 116,000 won ($86) to 501,000 won ($371), fifth on the Kospi.
Analyst comments are translated from Korean. Won figures are converted at 1,350.4 won to the dollar, the Seoul close on September 4.
