South Korean Media: Samsung Electro-Mechanics MLCC Lead Time Extends to 52 Weeks.

01 Long-Term Supply Agreements Expand to Semiconductor Substrates, Further Intensifying Supply Tightness

Previously, Long-Term Agreements (LTAs) were mainly concentrated in MLCC and silicon capacitor segments, but they are now gradually extending to semiconductor packaging substrates, worsening substrate supply shortages.

On October 19, Samsung Electro-Mechanics signed a long-term supply agreement worth 360.5 billion won for memory semiconductor packaging substrates with a global memory vendor. Starting next year, the company will supply high-performance substrates for next-generation memory devices to the customer over a one-year period. This marks the first LTA in the substrate business disclosed by Samsung Electro-Mechanics this year.

Securities industry insiders speculate that the contract may primarily cover BGA (Ball Grid Array) substrates for memory chips, and may also include FC-BGA (Flip-Chip Ball Grid Array) substrates for high-performance semiconductors.

BGA is a type of packaging substrate that provides electrical interconnection between memory chips such as DRAM and NAND flash and the mainboard.

While global substrate manufacturers in Taiwan, China, Japan and other regions are ramping up capacity expansion investments focused on high-value-added ABF (Ajinomoto Build-up Film) substrates, even BGA substrates made with BT resin for general-purpose memory chips are now facing supply shortages.

A researcher at South Korean securities firm Meritz Securities commented: “Supply contracts for BT-based substrates have been disclosed for the first time, further confirming that the market has shifted to a supplier-favorable dynamic.” The analyst added: “This is because major players have adopted relatively conservative capacity expansion strategies, worsening the supply-demand imbalance.”

02 Enhanced Bargaining Power; Price Increases Expected to Drive Profit Growth

With Samsung Electro-Mechanics gaining stronger pricing power, it is expected to benefit from rising product selling prices.

Industry estimates put the operating profit margin of Samsung Electro-Mechanics’ FC-BGA business at approximately 30%, while its BGA substrate business posts an operating margin of around 8%. Some analysts forecast that these two segments could see their operating profit margins rise to 40% and 10% respectively next year.

Driven by the simultaneous growth of its MLCC and substrate businesses, market expectations for Samsung Electro-Mechanics’ full-year operating profit are climbing.

Samsung Electro-Mechanics recorded revenue of 3.4572 trillion won and operating profit of 440.4 billion won in the second quarter. Consensus estimates from the securities market project third-quarter revenue of 3.8282 trillion won and operating profit of 645.4 billion won.

For the full year, the market projects Samsung Electro-Mechanics’ operating profit to exceed 2 trillion won.

A researcher at IBK Investment & Securities stressed: “Once the impact of MLCC price hikes kicks in, operating profit will come in above prior expectations. Operating profit is forecast to reach 4.4 trillion won next year, when the price increase effect stemming from tight supply will become far more pronounced.”

03 From Lead Times to Prices, MLCC Tightness Continues to Escalate

In fact, MLCC lead times have lengthened far faster than expected.

Back in August this year, an analyst at South Korea’s iM Securities commented: “Lead-time pressure that initially emerged for small-size products is spreading to mid-size and large-size grades. As of August, the average lead time for high-capacity MLCCs stood at around 21 weeks, an extension of five weeks from the start of the year.” Now, Samsung Electro-Mechanics’ lead time has climbed to 52 weeks.

The scope of shortages is also widening. An analyst at iM Securities noted in September: “Last month, shortages were concentrated mainly on high-capacitance MLCCs, but this month they have spread to general-purpose MLCCs. Prices of some items have even surged by as much as 280% within a single month.”

On the pricing front, according to TechNews, Samsung Electro-Mechanics raised prices by 30% across all MLCC products under its Markup Business Code, effective August 1, from existing levels.

Separately, per TrendForce research, Samsung Electro-Mechanics has revised upward its Q4 2026 quotations for OEM and ODM customers. Specifically, the firm will hike prices of consumer-grade X5R products for OEM/ODM buyers by an average of 25% to 30%. The move aims to dampen order enthusiasm and free up production capacity to expand high-end production lines. For premium X6S grades deployed in AI servers, price adjustments will be negotiated on a customer-by-customer basis, with average increases ranging from 10% to 20%.