Samsung Electro-Mechanics wins W290b AI server component deal

Samsung Electro-Mechanics announced Tuesday it has signed a long-term supply agreement (LTA) worth 290 billion won ($213 million) with a major global company to supply multilayer ceramic capacitors (MLCCs) and inductors for AI servers.

The deal is the fifth LTA the company has disclosed this year. The contract runs from January through the end of December next year. Samsung Electro-Mechanics has accumulated about 3.6 trillion won in LTAs this year across silicon capacitors, AI server MLCCs and inductors. The company said it is using long-term supply agreements to secure a stable demand base and accelerate a shift toward a higher-value product portfolio.

Demand from global big-tech companies for high-capacity, high-reliability MLCCs and inductors continues to grow. MLCCs are key passive components that regulate current flow in electronic circuits and prevent signal interference between components. Demand for Samsung Electro-Mechanics MLCCs is particularly strong in AI servers and data centers, where stable power supply and the ability to handle power fluctuations are critical.

Samsung Electro-Mechanics holds a global market share of more than 40 percent, splitting the AI server MLCC market with Japan's Murata. AI servers require more than 10 times as many MLCCs as conventional servers, and industry observers expect demand to keep rising.

According to Goldman Sachs, the AI server MLCC market is projected to grow at an average annual rate of about 34 percent, from $1.4 billion in 2025 to $5.8 billion in 2030.

Inductors, also covered by the supply agreement, are passive components that stabilize power delivery in response to current changes and reduce noise generated during power conversion. As AI servers grow more powerful and consume more electricity, inductors used in power supply circuits must increasingly handle high current at high efficiency.

Samsung Electro-Mechanics has signed MLCC LTAs with more than 10 global companies and is currently in talks with additional firms on further long-term agreements. The company said it plans to continue expanding its stable supply base by actively responding to market shifts and customer needs.

"As the global AI market advances technologically, the performance and reliability standards required of MLCCs are also rising," a Samsung Electro-Mechanics official said. "We are expanding cooperation with global customers on the strength of our differentiated technology and reliable supply capabilities."