Ibiden's strong outlook and margins in semiconductor substrates helped fuel a sharp rebound in Samsung Electro-Mechanics, as investors bet AI server demand will keep high-value FC-BGA supply tight.
Ibiden's upgraded earnings outlook and stronger-than-expected quarterly results reinforced expectations that demand for high-value semiconductor substrates used in AI and general-purpose servers remains robust, helping drive a four-session, 54.4% rebound in Samsung Electro-Mechanics shares. Samsung Electro-Mechanics closed at 1,356,000 won on August 5, up 14.43% on the day and sharply above the 879,000 won recorded on July 30, after bargain hunting and a historic July 31 jump in South Korea's KOSPI helped reverse a steep July selloff. The immediate catalyst was Ibiden's April-June fiscal 2026 earnings and upgraded full-year guidance. Ibiden raised its revenue forecast by 10% to ¥550 billion from ¥500 billion and lifted its operating profit outlook by 41% to ¥127 billion from ¥90 billion. First-quarter operating profit rose 52.4% year on year to ¥26.9 billion, beating market consensus by 28.9%, while revenue increased 26.4% to ¥123.2 billion. The company said demand for high-value substrates for AI servers and general-purpose servers exceeded expectations, supported by stable mass production at the Ono plant, efficient use of existing capacity, a weaker yen and higher selling prices. Market attention also focused on Ibiden's electronics segment, which includes FC-BGA. The company set a full-year operating margin target of 29.3% for the segment, effectively bringing forward by four years its path toward a 30% margin. That lifted expectations for Samsung Electro-Mechanics, which also beat market expectations in its second-quarter results with revenue of 3.46 trillion won and operating profit of 440.4 billion won. Analyst Ko Eui-young at iM Securities said Samsung Electro-Mechanics' FC-BGA operating margin could approach 30% in the second half from the low-20% range in the second quarter. The company said it plans to expand supply of high-end data center products, including new products for global big tech AI accelerators and server CPUs, while continuing capacity expansion tied to long-term supply discussions with top-tier semiconductor customers. The broader signal from both companies is that AI infrastructure spending is sustaining exceptional demand for advanced semiconductor substrates, and market participants expect shortages in high-value products such as FC-BGA to persist as AI server buildouts continue.