Samsung Electro-Mechanics signs W880b AI server MLCC supply deal, its second-largest this year

Samsung Electro-Mechanics said Friday it has signed a supply contract worth about 879.3 billion won ($659 million) with a major global company to provide multilayer ceramic capacitors (MLCCs) for AI servers.

The one-year contract runs from Dec. 21 through Dec. 21 next year. It is the second-largest long-term MLCC supply contract the company has disclosed this year and its eighth such agreement overall.

Since May, the cumulative value of long-term supply contracts for key components — including silicon capacitors, AI server MLCCs, inductors and flip-chip ball grid array (FCBGA) packages — has reached about 5.18 trillion won on a disclosed basis.

Samsung Electro-Mechanics has completed or is pursuing long-term supply agreements with more than 50 customers, and expects more than half of its MLCC sales next year to be generated through such contracts.

The company aims to build a stable medium- to long-term supply framework for customers through multiple long-term contracts while strengthening a business structure centered on high-value-added products.

Demand for AI server MLCCs is growing alongside improvements in the performance of GPUs and application-specific integrated circuits (ASICs).

As the number of dies in AI-computing GPUs and ASICs increases, power consumption rises accordingly. The required MLCC capacity needed to ensure stable power delivery is expected to roughly double each year.

AI server MLCCs must meet demanding conditions — including high-temperature and high-voltage tolerance — in addition to offering high capacitance in an ultra-compact form, making the market difficult to enter.

Samsung Electro-Mechanics holds a market share of more than 40 percent in the AI server MLCC segment, keeping the company among the global leaders.

"Demand for high-performance, high-reliability MLCCs is expanding as the AI industry grows," a Samsung Electro-Mechanics official said. "We will continue to strengthen our competitiveness in the AI server MLCC market, backed by differentiated technology and stable supply capabilities."