Samsung Electro-Mechanics Signs 285B-Won AI Deal

Samsung Electro-Mechanics has inked a substantial 285 billion won ($219.23 million) agreement for key artificial intelligence (AI) server components with a major international corporation, as announced on September 29. This deal represents 2.5% of the company's total sales from the previous year and spans a one-year period, from January 1st to December 31st.

The identity of the enterprise involved in the contract remains undisclosed, adhering to a management non-disclosure agreement. However, this partnership signifies Samsung Electro-Mechanics' fifth long-term agreement (LTA) this year, underscoring the company's growing commitment to significant contracts.

Throughout the year, Samsung Electro-Mechanics has successfully secured major contracts, primarily for silicon capacitors, MLCCs for AI servers, and inductors. To date, the cumulative contract volume for 2023 has reached around 3.6 trillion won ($2.77 billion). Currently, the firm has secured long-term MLCC supply contracts with approximately 10 global entities, and there are ongoing discussions with multiple other companies, suggesting an upward trajectory in order volume.

The increasing power consumption and performance of AI servers have amplified the demand for high-capacity and high-reliability components. Notably, AI servers are equipped with more than ten times the number of MLCCs compared to regular servers. Samsung Electro-Mechanics currently boasts over 40% market share in the AI server MLCC market. The inductors supplied with these servers aid in reducing noise from power conversion processes and stabilizing the power supply.

As AI technology progresses, the demand for high-current and high-efficiency inductors from Samsung Electro-Mechanics is expected to grow. Samsung Electro-Mechanics attributes its success to its unique technological capabilities and dependable supply chain.