Semco Earnings: MLCC Capacity Utilization Is Bottoming out, Driven by Solid Non-IT Applications

Samsung Electro-Mechanics posted an operating income of KRW 180 billion for the March quarter, up 29% year on year and above our forecast of KRW 155 billion, driven by better-than-expected sales of multilayer ceramic capacitors and camera modules. While sales of the components division (mainly MLCC) were only 3% above our forecast, we estimate that the profitability was much better than we expected due to an improved product mix from solid sales to the industrial and automotive sectors. The optics & communication solutions division sales were up 47% year on year and 20% higher than our forecast due to better average selling prices and better shipments of Samsung’s flagship Galaxy S24.