--- title: "Samsung Electro-Mechanics doubled its profit on Nvidia, and the deal cuts both ways" description: "Samsung Electro-Mechanics doubled operating profit on AI parts and handed Nvidia a large slice of its 2028 substrate capacity, then opened price talks. The visibility is real; so is the dependence." publisher: "The Inference" section: "Chips" published: 2026-10-28T18:00:15.769Z modified: 2026-10-28T18:00:15.769Z canonical: https://theinference.org/article/samsung-electro-mechanics-doubled-its-profit-on-nvidia-and-the-deal-cuts-both-ways language: en keywords: "Samsung Electro Mechanics, Nvidia, Semiconductors, Substrates, Earnings, Supply Chain" --- # Samsung Electro-Mechanics doubled its profit on Nvidia, and the deal cuts both ways > Samsung Electro-Mechanics doubled operating profit on AI parts and handed Nvidia a large slice of its 2028 substrate capacity, then opened price talks. The visibility is real; so is the dependence. Samsung Electro-Mechanics opened its books on October 28 and showed the AI rebuild paying in cash, not promises: record quarterly revenue of 3.76 trillion won, up 30.3 percent from a year earlier, and operating profit of 691 billion won, up 165.5 percent, on [a preliminary filing](https://www.ajupress.com/view/20261028124625145) [1]. The operating margin doubled to 18.4 percent from 9.0 percent [1]. Shares in the KOSPI-listed component maker, which supplies chip-packaging substrates, multilayer ceramic capacitors (MLCCs) and camera modules, traded 11 percent higher at 1,333,000 won in midday trading in Seoul as of 12:44 p.m. [1]. ## One customer now sizes the factory The same day confirmed [the signed terms of its strategic partnership with Nvidia](https://www.eetasia.com/samsung-electro-mechanics-and-nvidia-ink-abf-substrate-supply-agreement/), first disclosed on October 21: dedicated ABF package-substrate lines at Sejong and Busan in South Korea, deliveries from 2026, double-digit annual supply growth, and by 2028 [Nvidia](https://theinference.org/markets/companies/nvidia) taking a significant portion of total annual substrate capacity [2]. That clause sizes the factory around one buyer's product roadmap. A parts maker that once sold to whoever called now plans capacity to a single customer's specification. *Chart: **Package substrates, not the legacy business, set the pace of the quarter** Bars ranking Samsung Electro-Mechanics Q3 2026 year-on-year growth rates: operating profit 165.5, package substrate sales 58, components sales 36, total revenue 30.3. Highlight package substrates.* *Year-on-year growth, Q3 2026 vs Q3 2025, percent. Preliminary regulatory filing and earnings call, October 28, 2026. Sources [1], [3]. [1][3]* ## The shortage is doing the pricing The earnings call added leverage. [Fourth-quarter shipments of ultra-large AI-server substrates will double](https://biz.chosun.com/en/en-it/2026/10/28/FPSYZY4QOBCXHFDFHHCBNDNTPY/) [5]. FC-BGA substrate capacity is falling short of the volumes customers request, and the company is [opening price talks citing raw material costs and tight supply](https://biz.chosun.com/en/en-it/2026/10/28/7Z45DFC6HNDIZN77QTHEVW7EWE/) [6]. Long-term supply contracts are set to cover [more than half of 2027 MLCC sales](https://biz.chosun.com/en/en-it/2026/10/28/6JNSYT4DXNDSFKDHQ7I7QN3WXU/) [4]. Capex will rise above the roughly 680 billion won flagged in September, with a 1.5 trillion won silicon-capacitor contract from May in hand [7]. [The package division grew sales 58 percent to 938 billion won](https://biz.heraldcorp.com/article/10917700); components grew 36 percent to 1.88 trillion won, on a more than 40 percent share of the AI-server MLCC market [3]. ## The buyer holds the lease The bull case is a locked-in 2027 [4]. The bear case is who holds the lock. Nvidia is not betting on one supplier: it is [funding Ibiden's Ono plant in Japan with a multibillion-dollar capacity reservation advance](https://markets.businessinsider.com/news/stocks/nvidia-and-supply-chain-partners-expand-capacity-to-accelerate-ai-infrastructure-buildout-1036648617) and backing Unimicron's substrate expansion in Taiwan under a separate reservation agreement, all part of a plan to lift its total substrate capacity 2.5 times over three years [9]. Samsung Electro-Mechanics is one line in that list. The price already leans far ahead of the print: the analyst mean compiled on [MarketScreener](https://www.marketscreener.com/news/samsung-electro-mechanics-posts-higher-q3-attributable-net-income-sales-up-ce785cd2d98dff2d) across 27 analysts sits 99.8 percent above the last close of 1,201,000 won, and the stock traded at 1,333,000 won on the results [8]. Watch the FCBGA price talks: if the hikes stick, the visibility is real. If Nvidia's next roadmap shrinks, a factory built to one customer's specification has few other buyers for it. ## Takeaway Samsung Electro-Mechanics doubled operating profit on AI demand, but handing Nvidia a large slice of its 2028 substrate capacity ties the factory to one buyer's roadmap. ## Sources 1. [Aju Press, Samsung Electro-Mechanics Q3 more than doubles, 28 October 2026](https://www.ajupress.com/view/20261028124625145) 2. [EE Times Asia, Samsung Electro-Mechanics and NVIDIA Ink ABF Substrate Supply Agreement, 28 October 2026](https://www.eetasia.com/samsung-electro-mechanics-and-nvidia-ink-abf-substrate-supply-agreement/) 3. [The Herald Business, Samsung Electro-Mechanics posts record quarterly profit on AI data center demand, 28 October 2026](https://biz.heraldcorp.com/article/10917700) 4. [Chosun Biz, Samsung Electro-Mechanics secures majority of 2027 AI MLCC sales via long-term deals, 28 October 2026](https://biz.chosun.com/en/en-it/2026/10/28/6JNSYT4DXNDSFKDHQ7I7QN3WXU/) 5. [Chosun Biz, Samsung Electro-Mechanics doubles Q4 AI server substrate shipments, 28 October 2026](https://biz.chosun.com/en/en-it/2026/10/28/FPSYZY4QOBCXHFDFHHCBNDNTPY/) 6. [Chosun Biz, Samsung Electro-Mechanics tightens FCBGA supply, seeks price hikes, 28 October 2026](https://biz.chosun.com/en/en-it/2026/10/28/7Z45DFC6HNDIZN77QTHEVW7EWE/) 7. [Chosun Biz, Samsung Electro-Mechanics boosts capex, scales AI parts production in Korea, 28 October 2026](https://biz.chosun.com/en/en-it/2026/10/28/Q3RS4KITOVFS3NQT62TLYFQ7NM/) 8. [MarketScreener, Samsung Electro-Mechanics Posts Higher Q3 Attributable Net Income; Sales Up (MT Newswires), 28 October 2026](https://www.marketscreener.com/news/samsung-electro-mechanics-posts-higher-q3-attributable-net-income-sales-up-ce785cd2d98dff2d) 9. [NVIDIA press release via Markets Insider, NVIDIA and Supply Chain Partners Expand Capacity to Accelerate AI Infrastructure Buildout, 21 October 2026](https://markets.businessinsider.com/news/stocks/nvidia-and-supply-chain-partners-expand-capacity-to-accelerate-ai-infrastructure-buildout-1036648617) --- Samsung Electro-Mechanics doubled its profit on Nvidia, and the deal cuts both ways — The Inference. Canonical: https://theinference.org/article/samsung-electro-mechanics-doubled-its-profit-on-nvidia-and-the-deal-cuts-both-ways