Samsung Electric forecasts that its third-quarter operating profit will surpass market expectations, driven by surging demand for high-value products for AI (artificial intelligence) servers despite a decline in the won-dollar exchange rate. To meet the sharp rise in demand from the AI industry, it also announced plans to expand semiconductor packaging substrate production facilities with an investment of approximately 6.8 trillion won.
Samsung Electric stated on the 28th that its board of directors decided to invest 4.27 trillion won to expand packaging substrate production capacity at its Sejong plant and 2.51 trillion won at its Vietnam subsidiary. Investment at the Sejong plant will be executed by the end of May 2028, while investment in Vietnam will be completed by the end of April of the same year.
This investment is part of the three mega-projects announced jointly by the government and Samsung at the end of June. At that time, Samsung declared a total investment of 140 trillion won in areas including HBM (high-bandwidth memory) fabs, cutting-edge displays, next-generation batteries, and packaging substrates for AI servers in the Chungcheong region.
Samsung Electric's flagship product, MLCC (multilayer ceramic capacitors), is seeing rapidly increasing demand centered on high-capacity and high-reliability products as investments in AI servers and data centers expand. FC-BGA (flip chip ball grid array), which Samsung Electric is also strengthening alongside high-value MLCCs, represents another pillar for boosting profitability. As one type of semiconductor substrate, FC-BGA is a high-performance packaging substrate with enhanced electrical and thermal properties, serving as an essential component for AI servers. Only a few companies, including Samsung Electric, can manufacture high-specification FC-BGAs for Yangsan.
Consequently, the market environment has been created where demand exceeds supply, leading to rising product prices and improved profitability for Samsung Electric. Recently, reports from the securities industry are emerging that revise Samsung Electric's third-quarter operating profit forecast upward by about 10% from the previous estimate of around 600 billion won to between 650 billion and 660 billion won. Observations both inside and outside the industry lean toward the view that actual third-quarter operating profit will meet or exceed this raised benchmark. Although the won-dollar exchange rate has declined compared to the previous quarter, creating a burden on performance, analyses suggest that the expansion of high-value product share will offset this impact.
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