Samsung Electro-Mechanics Co. has secured a deal worth millions of dollars to supply multilayer ceramic capacitors (MLCCs) to BYD Co. and other Chinese automotive electronics manufacturers, industry sources confirmed on Wednesday.
BYD, now the world’s largest electric vehicle (EV) maker, surpassed Tesla Inc. in terms of market leadership. This supply agreement highlights Samsung’s growing focus on the automotive electronics market, particularly for components like camera lenses and semiconductor package substrates used in autonomous driving. The company has been actively expanding its customer base, with an emphasis on the EV sector.
MLCCs are essential in regulating the flow of electricity within electrical and electronic circuits. They play a crucial role in the stable operation of systems used in EVs, self-driving cars, smartphones, and the Internet of Things (IoT). These capacitors are particularly important in automotive applications due to their ability to control the power flow in advanced automotive systems.
Approximately half of Samsung Electro-Mechanics’ revenue is generated from the sale of MLCCs, with automotive-grade MLCCs offering higher profit margins compared to other types. Modern vehicles contain between 3,000 and 10,000 MLCCs, which are used in driving assistance, autonomous driving, infotainment systems, and power transmission. As the industry shifts toward electrification, the number of MLCCs in cars has risen dramatically, now reaching between 12,000 and 18,000 units per vehicle.
At a shareholder meeting last year, Chang Duckhyun, CEO of Samsung Electro-Mechanics, mentioned that the company had transitioned into an automotive parts manufacturer and had secured over 50 new customers in the automotive electronics market.
In recent developments, Jay Y. Lee, chairman of Samsung Electronics, visited BYD’s headquarters last month to meet with Chairman Wang Chuanfu. Lee’s trip to China also included a tour of Xiaomi’s factory, fueling speculation that Samsung may be exploring new partnerships in the automotive electronics sector.
For the year 2024, Samsung Electro-Mechanics reported an 11% increase in operating profit, reaching 735 billion won ($515 million), with sales rising 16% to 10.29 trillion won. The company’s share price rose by 2.1% to 122,100 won in morning trading, outpacing a 0.6% dip in the broader Kospi index.
