Samsung Electro-Mechanics disclosed on Tuesday that it has inked a supply agreement with a global tech giant for multi-layer ceramic capacitors (MLCCs) designed for artificial intelligence (AI) servers. The deal, valued at approximately 450 billion KRW (about 290.26 million USD), spans from January 1, 2027, to December 31, 2027.

MLCCs play a crucial role in electronic devices by storing electricity and delivering it steadily to semiconductors, ensuring smooth operations. These components enhance both performance and stability by eliminating signal interference within electronic products. As sudden power fluctuations in servers can significantly impact performance, MLCCs have become increasingly vital in maintaining stable power control, especially in artificial intelligence (AI) server environments.

AI servers typically incorporate over ten times more MLCCs than standard servers. A single graphic processing unit (GPU) can house more than 20,000 MLCCs, while a server rack may contain up to 600,000.

The market for AI server MLCCs is characterized by high entry barriers due to stringent technical requirements. Consequently, only a handful of companies dominate the global supply. While Samsung Electro-Mechanics holds a 25% share of the overall MLCC market worldwide, it commands over 40% of the technologically demanding AI server MLCC segment.

Leveraging its proprietary material and process technologies, Samsung Electro-Mechanics is expanding its portfolio of AI server products. These components boast ultra-small sizes, ultra-high capacities, and superior performance under high-temperature and high-voltage conditions. Large-scale contracts are uncommon in the MLCC industry, making this agreement a testament to both the supply constraints and robust demand for AI server MLCCs.

In the wake of this contract, Samsung Electro-Mechanics is engaging in discussions with global clients and major tech firms to explore supply expansion beyond 2027. The company aims to steadily increase its focus on high-value products, particularly in AI and automotive electronics.

Chang Deok-hyun, Chief Executive Officer (CEO) of Samsung Electro-Mechanics, remarked that this contract underscores the technological excellence of the MLCCs as pivotal components in the AI era. It's committed to proactively developing cutting-edge products tailored to customer needs and capturing market opportunities.

In a related development, Samsung Electro-Mechanics recently secured a supply contract for silicon capacitors worth approximately 1.5 trillion KRW (about 967.59 million USD) with a major global corporation. Through this agreement, the company seeks to accelerate its expansion into the next-generation AI infrastructure market.

Samsung Electro-Mechanics disclosed on Tuesday that it has inked a supply agreement with a …

Samsung Electro-Mechanics Secures 450 Million KRW MLCC Supply Deal for AI Servers: What This Means for the Tech Industry