Samsung Electro-Mechanics eyes turnaround with Galaxy AI

Samsung Electro-Mechanics Co., the top electronic components maker in South Korea, aims for a turnaround this year with the launch of the first artificial intelligence-powered Galaxy phone.

It achieved an estimated 656.8 billion won ($497.6 million) in operating profit last year, down 51% on-year, according to financial data research firm FnGuide.

The company, which supplies components to Samsung Electronics Co.’s Galaxy series, was hit hard by the downturn in the smartphone market. Samsung Electro-Mechanics’ flagship products include camera modules and multi-layer ceramic capacitors (MLCCs) for mobile phones and other electronic devices.

The electronic parts maker is set for a turnaround by achieving a 44% increase on-year to 939.7 billion won operating profit this year and more than 1 trillion won profit next year, FnGuide said.  

Samsung’s first AI-powered phone Galaxy 24, which will be unveiled at its Unpacked event on Jan. 17, is forecast to boost the electronic part producer’s earnings. The company will improve its profitability as the AI phone and other smartphones need more MLCCs, an industry source said.

MLCCs are used for the stable performance of electronic devices and electric vehicles. Inside the devices or cars, they control electric currents and prevent electromagnetic interference between components.

The company aims for steady growth in the mid to long term as its products can be widely used for EVs and AI-powered devices. In its shareholders meeting last March, Samsung Electro-Mechanics said it will leap forward as an automotive parts company amid growing demand for EV components.

Samsung Electro-Mechanics will accelerate its supply of EV parts to US carmakers. The company said last November that it will set up an affiliate in Mexico this year to produce camera modules for the eco-friendly vehicles.

Write to Eui-Myung Park at uimyung@hankyung.com


Jihyun Kim edited this article.