Nam Hyun-woo has worked as a staff writer at The Korea Times since 2013, mostly covering business and politics. He currently belongs to the Business Desk where he covers topics such as emerging tech, AI, ICT and Korea's chaebol community. Prior to joining the team, he was the paper's correspondent for the presidential office of Korea during the Yoon Suk Yeol and Moon Jae-in administrations.
Samsung Electro-Mechanics bags $294 mil. MLCC supply deal with US Big Tech firm
Samsung Electro-Mechanics' multilayer ceramic capacitors / Courtesy of Samsung Electro-Mechanics
By Nam Hyun-woo
Samsung Electro-Mechanics will supply multilayer ceramic capacitors (MLCCs) for artificial intelligence (AI) servers to a U.S. Big Tech firm, signing a $294 million (454 billion won) contract.
The company said in a regulatory filing Tuesday that it has signed a one-year supply deal that will begin on Jan. 1 next year. The company did not identify the customer, but sources said it is a U.S. cloud service provider.
The deal accounts for approximately 9 percent of the component division's 2025 revenue of 5.2 trillion won.
MLCC is a component that stabilizes power for semiconductors and other electronic devices. As power fluctuations in servers can directly affect performance, MLCCs have become increasingly important in AI server environments.
AI server applications require high-performance MLCCs that can withstand the harsh operating conditions created by intensive computing workloads, such as high heat and greater stress for warpage.
AI servers contain more than 10 times as many MLCCs as conventional servers. A typical AI graphics processing unit is equipped with more than 20,000 MLCCs, meaning an AI server rack can contain up to 600,000.
Samsung Electro-Mechanics accounts for approximately 25 percent of the global MLCC market, following Japan's Murata Manufacturing, but leads the AI server MLCC market with a share of more than 40 percent.
Samsung Electro-Mechanics' manufacturing site in Suwon, Gyeonggi Province / Courtesy of Samsung Electro-Mechanics
The latest deal is viewed as a long-term supply agreement, given that the industry has traditionally signed supply contracts on a quarterly or spot basis. With demand for MLCCs continuing to rise amid AI expansion, supply remains constrained, leading cloud service providers and AI server makers to increasingly seek long-term agreements to secure stability.
The company said it is engaging with global customers and Big Tech companies to discuss supply expansion after 2027 following the latest deal and will increase high-value products in its sales mix.
“The contract demonstrates that Samsung Electro-Mechanics’ MLCC technology has been recognized as a key component in the AI era,” CEO Chang Duck-hyun said. “We will continue to lead the market by developing next-generation cutting-edge products tailored to customers' needs.”