Samsung Electro-Mechanics lands W300b MLCC deal with global tech giant

Samsung Electro-Mechanics said Thursday it has signed a supply contract worth about 300 billion won ($203 million) with a major global company to provide multilayer ceramic capacitors (MLCC) for AI servers. The contract runs for one year, from Jan. 1 to Dec. 31, 2027.

A company official said the deal reflects recognition of Samsung Electro-Mechanics' MLCC design technology, product reliability in high-temperature and high-voltage environments, and its capacity for large-scale supply and quality management.

The contract is further evidence that Samsung Electro-Mechanics is proving its competitiveness in the AI server components market while expanding its global customer base. MLCC — often called the "rice of the electronics industry" — act as a kind of dam, storing electricity and releasing it in stable, controlled amounts as needed.

Samsung Electro-Mechanics has been closing a series of long-term supply agreements for key AI server components this year. In May, it signed a long-term deal worth about 1.5 trillion won to supply silicon capacitors to a global customer, and in June it concluded a roughly 450 billion won MLCC supply contract with a global big-tech firm for AI servers.

Industry observers have called the string of large-scale, long-term MLCC contracts unusual. Samsung Electro-Mechanics said the deals signal more than a simple supply arrangement — they show that MLCC is transitioning into a strategic component that determines the performance and stability of AI infrastructure.

Samsung Electro-Mechanics currently holds more than 40 percent of the AI server MLCC market, keeping it among the global leaders. AI server applications require more than 10 times the number of MLCC units used in standard servers — up to 600,000 per server rack — and the components must maintain stable performance in ultra-compact, ultra-high-capacity, high-temperature and high-voltage conditions, setting a high technology barrier. In practice, only a limited number of suppliers can meet these requirements.

The company is currently in talks with multiple global customers on medium- to long-term MLCC supply contracts. Through expanding long-term agreements, it aims to secure a stable demand base while shifting its product portfolio toward higher-value AI server components.

Samsung Electro-Mechanics President Jang Deok-hyeon said the contract "is the result of our MLCC being recognized as a core component of AI infrastructure." He added: "Building on our customers' trust, we will develop next-generation leading-edge products, establish a stable supply system, and lead the AI parts market."

The company's component division, which produces MLCC, ran at 95 percent capacity utilization in the first quarter. Samsung Electro-Mechanics is expanding its factory in the Philippines to meet rising demand, but mass production there is not expected until 2027 or later. Research firm TrendForce has forecast that the industry will begin facing a serious supply shortage from the end of the third quarter this year.