Samsung's Lee inspects MLCC plant in Philippines as it eyes turnaround

Samsung Group Chairman Jay Y. Lee on Sunday inspected Samsung Electro-Mechanics Co.’s production facilities for multilayer ceramic capacitors (MLCCs) in the Philippines. Lee's visit comes as the company strives to lead the market in automotive semiconductor parts alongside an electric vehicle and autonomous driving market expansion.

The company operates two factories in the Philippines, which serve as one of the company’s two overseas production bases, along with one in Tianjin, China. Its two domestic plants in Suwon, Gyeonggi Province, and the southeast port city of Busan focus on research and development.

MLCCs act as dams that charge and discharge certain amounts of electricity to control flow and are regarded as the rice of the electronics industry.

They are critical to the stable operation of electrical and electronic circuits used in EVs and self-driving cars, as well as in smartphones and the Internet of Things (IoT).

Samsung Electro-Mechanics has been rolling out MLCCs used in advanced driver-assistance systems, anti-lock braking systems and power trains in the Philippine city of Calamba since 2000.

It built a second plant there in 2012 and added production lines with an investment of 288 billion won in 2015 to foster its MLCC business as a growth engine.

The MLCC market is projected to grow to 9.5 trillion won by 2028, more than double the 4 trillion won in 2023, according to industry observers.

Around 1,000 MLCCs are embedded in a typical IT product, while from 3,000 to 20,000 MLCCs are installed in EVs. Automotive MLCCs are more than three times as expensive as others.

Lee visited the plant as part of the business delegation accompanying Korean President Yoo Suk Yeol’s state visit to the Southeast Asian country.

This year, Samsung Electro-Mechanics is expected to make a business turnaround after suffering a 46% plunge in operating profit in 2023 from the year prior.

The launch of the 2024 Galaxy smartphone lines by Samsung Electronics Co. is contributing a great deal to its sales growth.

Samsung Electro-Mechanics is targeting 1 trillion won ($742 million) in sales of automotive MLCCs in 2024. Comparative figures for previous years are not available.

In 2025, it is aiming at 2 trillion won in sales from automotive components, including MLCCs, carmera modules and semiconductor package substrates.

Write to Chae-Yeon Kim at Why29@hankyung.com
 

Yeonhee Kim edited this article