Samsung, LG Innotek earnings rise on AI chip demand

South Korean electronic parts makers Samsung Electro-Mechanics and LG Innotek reported stronger first-quarter earnings.

Demand for AI-related semiconductor substrates and components tightened capacity and lifted analyst expectations.

Samsung Electro-Mechanics posted 3.2 trillion won (US$2.18 billion) in revenue and 280.6 billion won (US$191 million) in operating profit.

Local brokerages raised their target prices above 1 million won (US$680).

LG Innotek reported 5.5 trillion won (US$3.76 billion) in revenue and 295.3 billion won (US$201 million) in operating profit.

The company is expanding substrate production as demand rose.

🧠 Food for thought

Implications, context, and why it matters.

Demand for Samsung Electro-Mechanics’ advanced FC-BGA substrates tops current output by more than 50% 1.
The company plans to more than double facility spending in 2026, with investment set to pass 2 trillion won (US$1.36 billion) 2.
That plan includes about 1.8 trillion won (US$1.2 billion) for a new FC-BGA plant in Vietnam 3.
The buildout targets AI data-center demand while Samsung Electro-Mechanics adds FC-BGA customers such as Broadcom, a US chip and networking company, plus Google, Amazon and Nvidia 3.

The rush to secure graphics processing units (GPUs) can draw attention away from tightening supply of substrates and multilayer ceramic capacitors (MLCCs) 2.
AI servers use 10 to 15 times more MLCCs than general-purpose servers. Demand is also moving toward higher-capacitance, higher-temperature and higher-voltage parts 4.
That surge is helping create a seller’s market in some high-end parts. It may give Samsung Electro-Mechanics and Japan’s Murata Manufacturing, an electronic components maker, more room to raise prices 1.
Higher component prices could lift the cost of building AI infrastructure, which may pressure the financial models of cloud providers and companies spending heavily on AI 1.