MLCC also enters the "long-term agreement era": Samsung Electro-Mechanics signs a $200 million long-term agreement with a tech giant, securing supply through 2027.

MLCC also enters the "long-term agreement era": Samsung Electro-Mechanics signs a $200 million long-term agreement with a tech giant, securing supply through 2027.

```

Samsung Electro-Mechanics is pushing the AI server MLCC business onto a "long-term contract" track, a trend that is reshaping the supply and demand structure of this core electronic component.

According to reports, Samsung Electro-Mechanics disclosed on July 23 that the company had signed an MLCC supply contract worth 295.12 billion won (about $204 million) with a global large-scale technology company, with the supply period covering all of 2027. The transaction counterpart was not disclosed due to a confidentiality agreement between the two parties.

This is the second consecutive month that Samsung Electro-Mechanics has secured a similar large-scale order, following a roughly 450 billion won AI server MLCC order in June. The total value of publicly disclosed AI server MLCC contracts this year has reached 75 billion won (about $510 million). Including the approximately 1.5 trillion won long-term silicon capacitor contract signed in May, the total value of this year's AI server components supply agreements has exceeded 2.25 trillion won (about $1.5 billion).

Samsung Electro-Mechanics President Chang Duck-hyun stated:

"This large-scale contract is a result of our MLCC technology being fully recognized as a core component for AI infrastructure. Based on deep trust from customers, we will accelerate the development of next-generation cutting-edge products, build a stable supply chain, and lead the AI components market."

On the day the news was released, Samsung Electro-Mechanics' stock price soared over 8% intraday, reaching 1.475 million won, leading gains among KOSPI component stocks ahead of Samsung Electronics and SK Hynix.

Continuous Large Orders: AI Server MLCC Orders Accumulate Rapidly

The contract amount is about 2.6% of Samsung Electro-Mechanics' consolidated revenue of 11.3145 trillion won last year, supplying large quantities of core high-performance MLCCs for customer’s AI servers and data center systems. Looking at the timeline, Samsung Electro-Mechanics’ AI server component orders this year have clearly accelerated:

In May, the company signed a long-term silicon capacitor supply contract worth about 1.5 trillion won with a global customer; in June, again signed an AI server MLCC supply agreement of about 450 billion won with a global large technology company; the contract disclosed in July further pushed the total value of publicly announced AI server MLCC contracts this year to 75 billion won.

Reports note that such intensive large-scale long-term MLCC supply contracts are rare in the industry, marking the accelerated shift of MLCC—a component traditionally dominated by short-term orders—toward long-term contract models driven by AI infrastructure demand.

MLCC is known as the "rice of the electronics industry" for its core function of providing stable current and controlling voltage fluctuations in electronic circuits. In AI server scenarios, this function’s strategic value is greatly amplified.

Compared to ordinary servers, the number of MLCCs required for AI servers is more than ten times higher—up to 600,000 MLCCs can be installed on each server rack.

Meanwhile, AI servers require extremely stringent MLCC specifications, including ultra-miniaturization, ultra-large capacity, high-temperature resistance, high-voltage endurance, and substrate warping resistance, setting a high technical threshold. Very few companies actually possess the ability to supply at scale.

Regarding silicon capacitors, these products are installed inside AI chip packages (including GPUs and high-bandwidth memory, HBM), serving to stabilize the power supply. Their resistance is about one percent that of traditional MLCC, offering outstanding performance advantages.

Samsung Electro-Mechanics maintains a global leading position in the AI server MLCC market, with a market share exceeding 40%. This market share advantage is considered the key support for the company’s continuous favoritism from major clients, and is also an important driving factor behind the sharp rise in its share price after the silicon capacitor long-term contract disclosure in May.

Samsung Electro-Mechanics stated that it is currently holding further discussions with multiple global clients regarding mid- to long-term MLCC supply plans. By expanding long-term supply contracts, the company aims to reinforce stable demand for AI server MLCCs, while accelerating a transformation towards high value-added product portfolios centered on industrial, automotive electronics, and AI server applications.

Risk Warning and DisclaimerThe market has risks; investment must be cautious. This article does not constitute personal investment advice nor has it taken into account the special investment goals, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investment based on this is at your own risk. ```