Samsung Electro-Mechanics third-quarter operating profit jumps 165.5 percent on AI demand

Samsung Electro-Mechanics said Wednesday its third-quarter operating profit rose 165.5 percent from a year earlier to 691 billion won ($522 million), driven by rising sales of high-value components for AI data centers and automotive applications.

Revenue climbed 30.3 percent to 3.76 trillion won ($2.85 billion) in the three months to Sept. 30, from 2.89 trillion won a year earlier, according to a regulatory filing. The operating margin reached 18.4 percent, up from 9.0 percent a year earlier and 12.7 percent in the previous quarter.

The Component division posted 1.88 trillion won ($1.42 billion) in sales, up 36 percent from a year earlier, as AI data centers drove revenue growth across servers, networks and power applications and an improved mix of high-value products. The Package Solutions division reported 939 billion won ($710 million), up 58 percent, with flip-chip ball grid arrays growing across AI data center and automotive applications and supplies of high-value substrates for server CPUs, AI accelerators and networks expanding. The Optical Solutions division recorded 941 billion won ($712 million), up 3 percent from a year earlier.

Profit before income tax from continuing operations came to 610 billion won ($461 million), up 116.4 percent from 282 billion won a year earlier.

In September the company signed a 1.07 trillion won ($811 million) contract with a global major company to supply MLCCs for AI servers, adding to cumulative orders for silicon capacitors and AI server MLCCs booked since May.

For the fourth quarter, the company expects strong demand for high-end AI data center products to continue and plans to expand production capacity at its sites in step with customer needs. It also said mass production of high-resolution sensing modules for humanoid robots will begin.

"The AI era is still Jan. 1," Samsung Electro-Mechanics President Chang Duck-hyun said. "We need to actively respond to the growth and innovation that AI will lead."