Samsung Electro-Mechanics hits record $7.7b revenue on AI, EV demand

Samsung Electro-Mechanics reported its highest annual revenue in 2025, reaching 11.3 trillion won (US$7.7 billion), driven by increased demand for components used in AI servers and electric vehicles.

The company’s operating profit rose 24 percent year-on-year to 913.3 billion won (US$622.9 million), the highest since 2021.

Fourth-quarter revenue reached 2.9 trillion won (US$1.9 billion), up 16 percent from the previous year, with operating profit more than doubling to 239.5 billion won (US$163.3 million), though it declined 8 percent from Q3.

The firm posted an annual operating margin of around 8.1 percent, improving from 4.6 percent in the same quarter last year.

🔗 Source: The Korea Herald

🧠 Food for thought

Implications, context, and why it matters.

Key financial and operational metrics require scrutiny

The planned 2026 capital expenditures and the related capacity gains for multilayer ceramic capacitors (MLCCs) and FC-BGA substrates should be verified.
Enough detail should be provided to confirm whether 2026 demand from AI, servers, and vehicles can be met, since production and scaling challenges have been flagged.
The reasons behind the 8.1% full-year operating margin should be reviewed, including product mix and costs tied to production ramp-ups.
That backdrop should be used to judge whether profitability can rise toward peers such as Murata Manufacturing, which reported an 18.3% operating margin for the first half of the fiscal year ending March 2025.

Full capacity guidance points to continued tightness for FC-BGA supply

Samsung Electro-Mechanics expects FC-BGA lines to run at full capacity in the second half of 2026, which suggests high-performance substrate supply may stay constrained.
In 2023, global substrate output lagged demand by 9%, while lead times ran above 30 weeks 1.
OEMs and data center builders may want long-term supply agreements for 2026 and 2027 to limit exposure to price increases and shortages.
Investors could also watch adjacent suppliers, including Ajinomoto, a Japanese food and chemicals company that also supplies Ajinomoto Build-up Film (ABF) resin, an insulating material used in advanced chip substrates, and has been described as near-monopoly supplier of ABF resin in some industry commentary 2. Major substrate makers such as Unimicron and Ibiden also stand out 3.