Samsung Electro-Mechanics, LG Innotek Stock Prices Decline 40% and 57% in Past Month

According to KB Securities analyst Lee Chang-min, Samsung Electro-Mechanics and LG Innotek stock prices fell 40% and 57% respectively over the past month as of July 23, driven by profit-taking and concerns over AI infrastructure investment slowdown. Despite the pullback, fundamental conditions for both companies remain solid, with MLCC (multilayer ceramic capacitor) and substrate demand for AI data centers growing rapidly while supply expansion requires at least two years.

The shortage of AI server MLCCs and packaging substrates is intensifying, supporting product price increases and favorable contract terms for suppliers. KB Securities projects both companies will exceed market expectations in second-quarter results and upgraded them to most-preferred stock status, citing valuation relief from recent pullbacks.