Samsung Electro-Mechanics has begun operations of its new multi layer ceramic capacitor (MLCC) factory in Tianjin, China.
The company said during its second quarter conference call that the factory has begun operation at the current time, after completion of construction and trial testing conducted in the second quarter.
The company will use the Tianjin factory as its main production base for MLCC for IT and automotive application going forward, the firm said.
The new factory is 1.4 times larger than Samsung Electro-Mechanics’ existing factory at Tianjin.
The company is also expecting automotive MLCC shipment to grow by double digits in the second half of the year.
In the long term, Samsung Electro-Mechanics said its automotive MLCC growth rate will exceed that of growth rate of total MLCC.
It is expanding supply of the component to infotainment and powertrain sectors, the company said.
The overall MLCC market is also expected to grow in the second half, according to the company’s forecast.
It expects demand for MLCC from mobile, PC, TV and gaming to remain strong throughout the year.
The company’s component business, which manufactures MLCCs, saw sales of 1.19 trillion won in the second quarter, an increase of 42% year-on-year.
The company’s total sales during the quarter was 2.47 trillion won, while operating income was 339.3 billion won. This was an increase of 41% and 230%, respectively, the company said.
Samsung Electro-Mechanics said remote working trend cause MLCC demand to remain strong from PCs, servers and networks during the quarter.
The smartphone and automobile industries also bought MLCC in bulk to stock up, it said. Overall average sales price of the component increase from 5G and demand for premium, high capacity MLCCs from server and automotive sectors, the company said.
However, Chinese smartphones companies readjusted their stocks due to the impact of the global shortage and the COVID-19 outbreak in India, Samsung Electro-Mechanics said. But overall demand was enough to offset this, the company said.