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Supply agreement targets advanced memory chips
Samsung Electro-Mechanics has signed a long-term contract worth about 360.5 billion won to supply high-performance package substrates for memory semiconductors to an unidentified major global customer.
The South Korean electronics components maker said the contract was signed on the 18th and runs from Jan. 1 through Dec. 31, 2027. The precise value is 360.49 billion won, equal to 3.2% of the company’s 2025 consolidated revenue of 11.31 trillion won.
The agreement includes no deposit or advance payment, and its value may change. Samsung Electro-Mechanics withheld the customer’s identity and other details on confidentiality grounds. Some information will remain undisclosed through Dec. 31, 2027.
The contract value will not necessarily translate directly into revenue or profit in 2027. Financial results will depend on the delivery schedule, product mix, manufacturing costs and currency movements.
Long-term orders reach 4.3 trillion won
The deal is the seventh long-term supply contract Samsung Electro-Mechanics has disclosed since May 2026, bringing their combined value to about 4.3 trillion won. South Korean disclosure rules require the company to report contracts worth at least 2.5% of its latest annual revenue.
Previously announced agreements covered silicon capacitors, multilayer ceramic capacitors for artificial intelligence servers and inductors. The latest order expands the company’s long-term contract portfolio beyond electronic components into its package solutions business.
Multilayer ceramic capacitors store and deliver electricity while stabilizing voltage and current in electronic circuits. AI servers require high-capacity, highly reliable versions because they use more power and contain dense clusters of advanced chips. Inductors help regulate current during power conversion and delivery.
AI boom drives demand for advanced substrates
Package substrates connect semiconductor chips to a device’s main circuit board, carrying electrical signals and helping chips operate reliably. Advanced versions support the rapid transfer and processing of large amounts of data.
Producing them requires sophisticated manufacturing techniques, including extremely fine circuits, multiple layers, thin designs and controls that prevent warping. Samsung Electro-Mechanics says it has capabilities in large-area fine circuitry and substrate warpage control.
Demand is rising alongside the expansion of generative AI and high-performance computing, which are increasing the need for next-generation memory products such as high-bandwidth memory and high-performance server DRAM modules.
“The importance of high-performance package substrates is growing further as the AI and high-performance computing markets expand,” a Samsung Electro-Mechanics representative said. The company plans to strengthen cooperation with customers and build a more stable supply system.
Company plans major FC-BGA expansion
Samsung Electro-Mechanics is pursuing 6.8 trillion won in investment related to flip-chip ball grid array, or FC-BGA, substrates. Its plans include 4.27 trillion won for a new fabrication facility in Sejong, South Korea, and 2.51 trillion won for an FC-BGA production line in Vietnam.
Current demand for FC-BGA products exceeds the company’s production capacity by more than 50%. The global market, valued at $10.9 billion in 2024, is projected to reach $24.1 billion by 2031.
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