---
title: "Samsung Electro-Mechanics' profit is forecast up 124% as its AI chief warns China has 10 rivals to its one"
description: "Samsung Electro-Mechanics builds the capacitors and substrates inside Big Tech's AI servers, and its 2026 operating profit is forecast to more than double. Its first chief AI officer says the only answer to Chinese rivals that outnumber his field more than ten to one is an internal army of AI agents."
publisher: "The Inference"
section: "Hardware"
published: 2026-10-14T15:12:13.585Z
modified: 2026-10-14T15:12:13.585Z
canonical: https://theinference.org/article/samsung-electro-mechanics-profit-is-forecast-up-124-as-its-ai-chief-warns-china-has-10-rivals-to-its-one
language: en
keywords: "Samsung Electro Mechanics, MLCC, Semiconductors, AI Servers, South Korea, Components"
---

# Samsung Electro-Mechanics' profit is forecast up 124% as its AI chief warns China has 10 rivals to its one

> Samsung Electro-Mechanics builds the capacitors and substrates inside Big Tech's AI servers, and its 2026 operating profit is forecast to more than double. Its first chief AI officer says the only answer to Chinese rivals that outnumber his field more than ten to one is an internal army of AI agents.

## The chief AI officer opened with the threat

Jang Woo-suk, executive vice president and the first chief AI officer of [Samsung Electro-Mechanics](https://theinference.org/markets/companies) (KRX: 009150), [gave his first interview on October 13, 2026](https://en.sedaily.com/finance/2026/10/13/samsung-electro-mechanics-ai-chief-warns-chinas-scale), at the company's Suwon plant and named the problem his new job exists to solve [1][2]. He calls it the "red sandwich crisis": Chinese rivals closing on technology and price at once [1].

"There are more than 10 times as many companies in the same business in China," Jang said. "That means we cannot hold off the pursuit by developing technology at the same pace they do" [1]. The same day, 200 employees opened a four-day hackathon at headquarters to build the AI agents he is betting on [1][2].

## The boom being defended is the company's biggest

Samsung Electro-Mechanics makes the multilayer ceramic capacitors (MLCCs) and flip-chip ball grid array (FC-BGA) substrates used in Big Tech's AI chips [1]. Data provider FnGuide [forecasts 2026 revenue of 14.43 trillion won ($10.1 billion) and operating profit of 2.05 trillion won ($1.4 billion)](https://en.sedaily.com/finance/2026/10/14/samsung-electro-mechanics-braces-for-china-push-even-in), up 28% and 124% [1]. [The stock gained more than 400% in 2026](https://theinference.org/article/samsung-s-capacitor-maker-declares-its-own-moore-s-law-and-ai-buyers-are-paying-for-it) through late September [3].

![Cross section of a multilayer ceramic chip capacitor showing its fine internal layers under magnification](https://storage.googleapis.com/theinference-public/img/23da9a4ffac23ad2.jpg)

*A cross section of a multilayer ceramic capacitor, the stacked ceramic-and-electrode part Samsung Electro-Mechanics builds for AI servers and its new chief AI officer is defending against Chinese rivals. (TubeTimeUS via Wikimedia Commons)*

*Chart: **Operating profit is forecast to more than double in 2026 and keep climbing** Samsung Electro-Mechanics operating profit: about 0.91 trillion won in 2025, a forecast 2.05 trillion won in 2026 and 3.01 trillion won in 2027, all marked as analyst estimates or forecasts.*

*Operating profit, KRW trillion. 2025 base year and 2027 projection from NH Investment & Securities reported May 29, 2026; 2026 from FnGuide consensus reported October 14, 2026. All three values are analyst estimates or forecasts. [1][4]*

## Big Tech's prepaid buying has reached the component layer

The multi-year prepaid buying that [Nvidia](https://theinference.org/markets/companies/nvidia), Google and [Microsoft](https://theinference.org/markets/companies/microsoft) brought to memory now covers components. [Samsung Electronics](https://theinference.org/markets/companies/samsung), the memory-chip maker and a separate company from Samsung Electro-Mechanics, has [locked 75% to 80% of next year's planned memory output in long-term deals](https://www.kedglobal.com/korean-chipmakers/newsView/ked202610090002) [5][6], on five-year contracts with 20% to 25% cash prepayments and clauses that bind buyers even if they cancel [5].

Samsung Electro-Mechanics has signed MLCC supply agreements worth 3.32 trillion won since May 2026 with about 10 global companies [7], and is finalizing a 700 billion won ($507 million) deal to supply MLCCs to Delta Electronics [5], a Taiwan-based maker of power supplies and cooling systems for AI data centers [8]. Signing it would push the order book past 4 trillion won [7].

Its board answered on September 28, 2026, with [6.78 trillion won ($4.99 billion) of new FC-BGA lines in Sejong and Vietnam](https://www.kedglobal.com/corporate-investment/newsView/ked202609280009), a commitment reported at up to 7 trillion won ($5.2 billion) and backed by [mid- to long-term supply commitments from unnamed Big Tech customers](https://theinference.org/article/ai-buyers-have-locked-w3-6tr-of-2027-parts-from-samsung-electro-mechanics) that will provide part of the capital [3][9]. Mass production begins only in September 2028 [3].

## One hundred AI projects against ten times the rivals

Jang's defense is mandatory and internal: every team carries an assigned AI-agent project, more than 100 of them under way, built on SEMCo-Work, a model the company runs on its own servers [1][2]. Through October 16, 200 employees compete for 33 million won ($23,000) in prizes to build agents that cut repetitive work [1][2].

His warning cuts inward as well. "More than 10 sites are being expanded and we are growing in scale, but in some areas we are also stagnating," he told employees, urging substance alongside size [2].

## Queues and a Japanese film keep rivals out, for now

Qualifying a new substrate supplier takes 12 to 24 months [3], and Japan's Ajinomoto, better known for food seasonings, supplies about 95% of the Ajinomoto Build-up Film (ABF) insulation inside every FC-BGA substrate [3]. Ibiden and Shinko, also Japanese, hold about 70% of the FC-BGA market; in AI-server capacitors Samsung Electro-Mechanics shares a duopoly with Japan's Murata [4]. Chinese numbers do not clear those queues quickly.

Jang's point about pace still stands, and [Choi Woo-young](https://theinference.org/markets/people), a professor at Seoul National University, names the risk on the other side: suppliers locked into five-year deals face defaults or forced renegotiation if the AI boom slows [5].

## October 28 is the first reading

[Provisional third-quarter results land on October 28, 2026](https://www.theglobeandmail.com/investing/markets/markets-news/Tipranks/6501106/samsung-electro-mechanics-sets-october-date-for-provisional-q3-2026-results-disclosure/), figures the company flags as provisional and subject to revision in audit [10]. The first test is operating profit against the 2.05 trillion won forecast [1]; behind it come the Delta Electronics MLCC signing and the hackathon's winning agents [1][5][7].

## Takeaway

Samsung Electro-Mechanics enters Q3 results on October 28 with forecast 2026 operating profit up 124%, a 4-trillion-won MLCC order book and a record $5 billion substrate buildout, but its first chief AI officer says scale alone cannot beat more than ten Chinese rivals: the defense is qualification moats, Japanese supplier lock-ins and more than 100 internal AI-agent projects.

## Sources

1. [Seoul Economic Daily, 'Samsung Electro-Mechanics Braces for China Push Even in Record Boom', 14 October 2026](https://en.sedaily.com/finance/2026/10/14/samsung-electro-mechanics-braces-for-china-push-even-in)
2. [Seoul Economic Daily, 'Samsung Electro-Mechanics AI Chief Warns China's Scale Demands Faster Pace', 13 October 2026](https://en.sedaily.com/finance/2026/10/13/samsung-electro-mechanics-ai-chief-warns-chinas-scale)
3. [Tech Times (via MSN), 'Samsung Electro-Mechanics commits $5 billion to AI chip substrates; record bet hits upstream wall', 28 September 2026](https://www.msn.com/en-us/news/other/samsung-electro-mechanics-commits-5-billion-to-ai-chip-substrates-record-bet-hits-upstream-wall/ar-AA2d8Ely)
4. [Tech Times, 'Samsung Electro-Mechanics AI Server Pivot: R&D Surges 36%, Capacity Cannot Match Big-Tech Demand', 29 May 2026](https://www.techtimes.com/articles/317337/20260529/samsung-electro-mechanics-ai-server-pivot-rd-surges-36-capacity-cannot-match-big-tech-demand.htm)
5. [Android Headlines, 'Samsung Memory Is Nearly Sold Out for Next Year as Big Tech Is Panic Buying', 13 October 2026](https://www.androidheadlines.com/2026/10/big-tech-locks-up-samsung-memory-output-ai-deals.html)
6. [KED Global, 'Samsung Electronics locks in 80% of next year's memory output through long-term deals', 9 October 2026](https://www.kedglobal.com/korean-chipmakers/newsView/ked202610090002)
7. [The Chosun Ilbo (via MSN), 'Samsung Electro-Mechanics nears 4 trillion won in AI MLCC contracts', September 2026](https://www.msn.com/en-xl/money/general/samsung-electro-mechanics-nears-4-trillion-won-in-ai-mlcc-contracts/ar-AA2cAJpd)
8. [Reuters via Yahoo Finance, 'Taiwan's Delta Electronics warns costs rising as AI data centre demand surges', 30 April 2026](https://finance.yahoo.com/markets/stocks/articles/taiwans-delta-electronics-warns-costs-102216801.html)
9. [KED Global, 'Samsung Electro-Mechanics to spend record $4.4 bn on FC-BGA expansion to meet AI boom', 28 September 2026](https://www.kedglobal.com/corporate-investment/newsView/ked202609280009)
10. [The Globe and Mail / TipRanks, 'Samsung Electro-Mechanics Sets October Date for Provisional Q3 2026 Results Disclosure', 13 October 2026](https://www.theglobeandmail.com/investing/markets/markets-news/Tipranks/6501106/samsung-electro-mechanics-sets-october-date-for-provisional-q3-2026-results-disclosure/)


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Samsung Electro-Mechanics' profit is forecast up 124% as its AI chief warns China has 10 rivals to its one — The Inference. Canonical: https://theinference.org/article/samsung-electro-mechanics-profit-is-forecast-up-124-as-its-ai-chief-warns-china-has-10-rivals-to-its-one