A Samsung Electro-Mechanics employee explains the company's MLCC products to overseas clients at the SEMCO Component College, an annual customer event held April 22-24 in Busan. (Samsung Electro-Mechanics)
A Samsung Electro-Mechanics employee explains the company's MLCC products to overseas clients at the SEMCO Component College, an annual customer event held April 22-24 in Busan. (Samsung Electro-Mechanics)

Samsung Electro-Mechanics on Thursday posted first-quarter operating profit of 280.6 billion won ($189 million), up 40 percent from a year earlier and well above the 271.5 billion won analysts had expected, as demand for the high-end semiconductor substrates used in AI accelerators drove the strongest growth in the components maker's portfolio.

Revenue rose 17 percent to 3.21 trillion won, beating the consensus of 3.09 trillion won.

The profit growth came despite a 71.4 billion won one-off retirement-related charge during the quarter. Stripping out the charge, operating profit would have approached 352 billion won, suggesting the underlying earnings momentum was stronger than the headline figure indicated.

The Samsung group affiliate, which supplies components to clients including Nvidia, Apple and major automakers, breaks out three business lines. Package solutions, which produce flip-chip ball grid array substrates known as FC-BGA, posted the largest jump. Sales rose 45 percent year-on-year to 725 billion won.

FC-BGA boards connect processor chips to the main circuit board inside servers and are produced in volume by only a handful of companies globally, including Japan's Ibiden and Shinko Electric, Taiwan's Unimicron, and Samsung Electro-Mechanics.

The components division, which makes multilayer ceramic capacitors used in AI servers and advanced driver assistance systems, grew 16 percent to 1.41 trillion won. Optical solutions, the camera module business tied to smartphone cycles, rose 5 percent to 1.08 trillion won.

The company said FC-BGA shipments expanded to "AI accelerators, server CPUs and high-end network substrates for global big-tech customers," and said it would begin volume shipments of network-use substrates to a new hyperscaler client in the second quarter. It did not name the customer.

Management pointed to continued strength in industrial and automotive components for the April-June period, citing rising data center power consumption and broader ADAS adoption.

The print lands against a stock that has more than doubled in a month. Shares closed at 827,000 won on Wednesday, up from 407,500 won at the end of March, and traded as high as around 835,000 won on Thursday afternoon.

Park Kang-ho of Daishin Securities said the company is on track for record annual results for a second straight year and flagged a possible MLCC price increase in the second half as the next catalyst.

By Moon Joon-hyun (mjh@heraldcorp.com)