Samsung's automotive goals lead to new MLCC factory opening in China

Samsung Group reported strong Q2 2020 results at an earnings call earlier today, in part thanks to improved profits recorded by the component solution division, Samsung Electro-Mechanics, particularly in the camera and 5G chip sectors. Interestingly enough, the recent earnings call also highlighted the tech giant's ambitions to have a deeper involvement with the automotive industry.

As you may recall, Samsung's various subsidiaries including SDI, System LSI, and Samsung Semiconductors have been in talks with carmaker Hyundai over the possibility of a deeper collaboration that may lead to Samsung Group having a larger stake in the automotive business. Now, according to a recent report from Pulse, Samsung Electro-Mechanics is looking to play a bigger role in the parent company's plans by improving its market share in the multilayer ceramic capacitor (MLCC) segment.

Churning out more automotive MLCCs by the end of the year

Samsung Electro-Mechanics first began mass-producing MLCCs for European and Chinese automakers in 2016, and the company has become the second-largest MLCC global supplier following Japan's Murata Manufacturing. But despite this achievement, the company has been struggling with its MLCC business since last year when Samsung Group was betting on the Galaxy Note 10 series to offset some of the losses experienced by Samsung Electro-Mechanics in the segment.

However, the component solution division revealed at the recent earnings call that it will complete expanding its new MLCC plant in Tianjin, China, before the end of 2020. Samsung Electro-Mechanics aims for this facility to become the center of its automotive MLCC business over the next few years.

Demand for automotive MLCC is rising on the back of autonomous cars, and Murata Manufacturing has been capitalizing on this market shift with great success. Samsung Electro-Mechanics is apparently looking to do the same. The company revealed that its new factory in Tianjin could start mass manufacturing IT and industrial MLCCs by the end of the year if demand will be high enough.

Mihai Matei - Senior Editor

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First Samsung device: SGH-A800

Mihai is a blogger and column writer at SamMobile. His first Samsung phone was an A800 which took a lot of beating, and a part of him still misses the novelty of the clamshell design. In his free time, he enjoys watching shows, documentaries, and stand-up comedy; listening to music, taking walks, and occasionally playing old(er) video games.

Business General Samsung Electromechanics