On September 1 Samsung Electro-Mechanics — a separately listed Samsung affiliate, not the phone-and-chip Samsung Electronics — disclosed a supply contract worth about ₩1.0722 trillion (roughly $783 million) for AI-server MLCCs. An MLCC — a multilayer ceramic capacitor — is a grain-sized passive component that steadies the flow of power inside an electronic device; a server needs thousands of them. The figure equals 9.5% of the company’s FY2025 consolidated revenue, and coverage describes it as its largest MLCC long-term supply contract to date. The buyer is confidential, which is routine for this kind of long-term component agreement. The most interesting line in the filing is the term: January 1 to December 31, 2027. (Conversions at roughly ₩1,370 per dollar, the September 2 Seoul close.)
What this means if you hold EWY. Samsung Electro-Mechanics is EWY’s fourth-largest holding at 3.63% (iShares factsheet, June 30, 2026) — this is your AI exposure that isn’t a memory chip. And the contract dates tell you something the headline doesn’t: the AI order is being placed now, but it reaches the income statement in 2027.
1. What was disclosed
About ₩1.0722 trillion, equal to 9.5% of last year’s consolidated revenue, for AI-server MLCCs, running the 2027 calendar year. Working backwards from that ratio puts FY2025 consolidated revenue at roughly ₩11.3 trillion (about $8.2 billion) — useful context, because it means a single contract is worth close to a tenth of a year’s sales. The counterparty is withheld under confidentiality, standard practice when a component maker locks in a large customer.
This is not an isolated win. Since May the company has, per local press coverage, signed roughly ₩2.25 trillion (about $1.64 billion) of long-term agreements in total across silicon capacitors (a newer capacitor type built on a silicon base) and AI-server MLCCs — that is the cumulative figure across the deals, not per customer — and it holds long-term MLCC agreements with around ten global customers. Stacked against an ₩11.3 trillion revenue base, that is a meaningful share of forward volume already committed.
2. Why AI-server MLCCs are a different product
The distinction is not marketing. An AI server carries, per industry estimates cited in the coverage, more than ten times the MLCC content of a standard device, because the power delivered to an accelerator has to be smoothed at far higher current and switched far faster. Those parts must also hold their characteristics at higher temperature and voltage, which narrows the field of suppliers that can make them to a handful worldwide. That scarcity is precisely why these contracts are written as multi-year, locked-in agreements rather than spot orders — the customer is securing supply, not shopping on price. The phase has numbers attached: Japan’s Murata, the segment leader, has guided its server-MLCC revenue up 85 to 90 percent for its fiscal 2026 and described AI-server demand as roughly twice its production capacity, while industry estimates cited in Korean coverage put Samsung Electro-Mechanics above 40% of the AI-server MLCC niche specifically. A field led by Murata, Samsung Electro-Mechanics and TDK is running order books ahead of capacity — which is what a locked-in, multi-year contract looks like from the supplier’s side.
3. The coordinate — which line, and when
The revenue lands in the components business, the passive-component segment — the non-chip parts, capacitors included — that sits inside consolidated sales — not in any semiconductor line. And the timing is the part worth marking: the signing is September 2026, the term opens January 1, 2027. The company has not disclosed its recognition method, so the sensible assumption is that revenue accrues as parts ship across the contract year rather than in a single lump. Either way, the gap between the announcement and the first booked won is roughly four months, and the full benefit spreads across twelve.
That gap is the transmission lag between an AI capital-spending boom and a parts supplier’s income statement. The chipmakers report the cycle first; the component makers report it later, and with more visibility, because their revenue is contracted in advance.
4. Before and after
The “before” is May 2026, when the current run of long-term agreements began. The “now” is a single ₩1.07 trillion contract disclosed September 1, the largest of the series. The watch-metric is dated and checkable: whether shipments start on schedule in the first quarter of 2027, whether the components segment shows the step-up in the quarterly disclosures that follow, and whether the roughly ten-customer roster produces further long-term agreements before then. Those are filings you can read, not forecasts.
5. ★ What it means for Korea
Korea’s AI trade is almost always told as a memory story — Samsung and SK Hynix, DRAM and HBM, the two names that dominate both the headlines and the large-cap index. But the cycle does not stop at the chip. It travels down the bill of materials into passive components, and it arrives there on a delay and under contract. That is the structural fact you can only see through a company like this one: Korea’s exposure to the AI build-out is wider than its two chipmakers, and the second wave shows up in your fund with a year’s lag and better visibility than the memory cycle ever offers. If you only watch DRAM prices, you are watching the fastest-moving part of Korea’s AI trade and missing the most contracted part of it.
Mr. Gat: “The chips get the headline. The capacitors get the 2027 revenue line — and they got it in writing.”
6. Getting the exposure
Samsung Electro-Mechanics trades on the Korea Exchange under 009150 and has no sponsored US listing, so buying it directly requires a brokerage account with Korean market access; the unsponsored over-the-counter quotes that exist are too thin to rely on. For most US investors the practical route is EWY, which carries it at 3.63% as the fund’s fourth-largest position — a real weight rather than a rounding error, and the reason this filing is worth a US holder’s attention at all.
7. The US anchor
The nearest US-listed comparison is a passive-component maker such as Vishay Intertechnology (NYSE: VSH), which sells into the same servers and rides the same capital-spending cycle one step behind the processor vendors. Not a perfect parallel: the US passives market is fragmented across several suppliers and geographies, while Korea’s exposure is concentrated in a single company that happens to be a top-five holding in the country ETF you own. The same cycle, but with far less diversification on the Korean side.
The wrap
The AI boom reached Korea’s parts bin, and it did so with a date attached: ₩1.07 trillion signed in September 2026, booked across 2027. For an EWY holder, that is a rare thing in this trade — an AI number you can put on a calendar.
FAQ
What is an MLCC? A multilayer ceramic capacitor: a tiny passive component that stabilizes power inside electronics. AI servers use more than ten times as many as ordinary devices, at higher temperature and voltage.
Who is the buyer? Not disclosed. The counterparty is withheld under a confidentiality clause, which is routine for large long-term component agreements.
How big is this for the company? The contract equals 9.5% of FY2025 consolidated revenue — roughly ₩11.3 trillion (about $8.2 billion) implied — so close to a tenth of a year’s sales, spread across the 2027 contract year. The company has not quantified any profit effect, and neither will we.
Does this change my EWY? Not mechanically. Samsung Electro-Mechanics stays at about 3.63% of the fund; what changes is the visibility of that position’s 2027 revenue.
What should I watch? Shipment start in early 2027, the components-segment line in the quarterly disclosures that follow, and any further long-term agreements from the roughly ten-customer roster. (Background for reading filings, not investment advice.)
Sources
Samsung Electro-Mechanics disclosure of September 1, 2026, as reported by mt.co.kr and hankyung: contract value about ₩1.0722 trillion, 9.5% of FY2025 consolidated revenue, term January 1 to December 31, 2027, counterparty withheld; roughly ₩2.25 trillion of long-term agreements signed since May across silicon capacitors and AI-server MLCCs, with about ten global MLCC customers. FY2025 revenue is derived from the disclosed 9.5% ratio. EWY weight of 3.63% per the iShares factsheet dated June 30, 2026. Conversions at approximately ₩1,370 per US dollar.