Related reading: AI PCB and Substrate Hub, Samsung Electro-Mechanics AI Infrastructure Re-Rating, AI PCB and Substrate Thesis, and Korea AI PCB Ecosystem: 10 Companies.

Mirae Asset Securities raised its Samsung Electro-Mechanics target price from KRW 530,000 to KRW 1.3 million. The number looks dramatic, but the mechanism is simple: move the valuation year from 2026 to 2028 and apply a 37x PER, which Mirae Asset links to the early phase of the 2017 MLCC shortage cycle.

That makes this less a normal earnings revision and more a valuation-frame revision. The core debate is whether Samsung Electro-Mechanics should still be read as a cyclical electronics component company, or whether AI server MLCC and FC-BGA demand has moved it into an AI-infrastructure bottleneck category.

TL;DR

1. Mirae Asset’s target math is 2028F EPS of KRW 34,764 multiplied by 37x, or KRW 1,286,268, rounded to KRW 1.3 million.
2. The 37x multiple is the key assumption. It is not a normal-cycle multiple; it is a peak shortage-cycle multiple drawn from the 2017 MLCC shortage setup.
3. At the May 7, 2026 close of KRW 917,000, Samsung Electro-Mechanics already trades at 26.4x that 2028F EPS. That is above a normal upcycle frame of roughly 25x and close to the 2018 shortage-peak frame of 28x.
4. Shortage signals are visible: some MLCC lead times are reportedly 20-24 weeks versus a normal 10 weeks, 2Q26 MLCC utilization is discussed around 95%, and inventory coverage is cited around 4 weeks versus a normal 6 weeks.
5. FC-BGA is the more structural leg. Mirae Asset lifted its FC-BGA ASP assumption by 13%, and package-solution operating profit is forecast to compound strongly through 2030.
6. The stock is no longer undiscovered. Hana, NH, Meritz, iM, KB and Mirae Asset have all moved into the KRW 1.0-1.3 million target range. The remaining question is how much of the shortage multiple is already in the price.

1. What KRW 1.3 Million Actually Means

The target-price formula is straightforward:

Target price = 2028F EPS x target PER
             = KRW 34,764 x 37.0
             = KRW 1,286,268
             = roughly KRW 1.3 million

The arithmetic is not the thesis. The thesis sits inside two choices:

Moving the earnings base from 2026 to 2028 is already a large change. Mirae Asset’s EPS path, as reported by local coverage, implies roughly:

Using 2028 EPS rather than 2026 EPS almost doubles the earnings denominator. Applying 37x to that denominator turns an earnings upgrade into a re-rating call.

The question for investors is therefore not, “Is KRW 1.3 million possible?” A better question is, “What has to be true for a 37x multiple on 2028 earnings to become acceptable?”

2. The 37x Multiple Is the Debate

Mirae Asset’s reported historical PER frame can be summarized this way:

The 37x multiple is not a neutral number. It says Samsung Electro-Mechanics is entering a shortage cycle similar enough to 2017 that the market may again pay a peak shortage multiple before all earnings have been printed.

That may be right. It may also be too aggressive. A 37x multiple on a company whose 10-year average is closer to 15x requires a very specific regime: tight supply, visible pricing power, customer prepayments or volume commitments, and margin expansion that survives more than one quarter.

This is why the article should be read as a conditional re-rating framework, not as a mechanical target-price endorsement.

3. Where the Current Price Already Sits

Samsung Electro-Mechanics closed at KRW 917,000 on May 7, 2026 in the local Research OS market snapshot. Against the same 2028F EPS of KRW 34,764, that close implies:

Current implied PER = 917,000 / 34,764 = 26.4x

The scenario table looks like this:

This is the most important practical point. The stock no longer prices Samsung Electro-Mechanics as a simple normal-cycle component recovery. At KRW 917,000, it is already above the normal upper-band frame and close to the 2018 shortage-peak frame.

From here, further re-rating depends less on “earnings are improving” and more on “the market accepts a 37x shortage multiple.”

4. Are the Shortage Signals Real?

The shortage indicators cited in the local report flow are meaningful:

These are valid shortage signals. Lead times stretch, utilization rises, and inventory falls. That combination is what gives price increases a path.

But the wording matters. The lead-time commentary refers to some global MLCC products, not necessarily every MLCC category. AI server MLCCs can be tight while commodity IT MLCCs remain less tight. The difference matters because the 2017 shortage cycle was broad. The 2026 cycle may be more AI-server-specific.

Samsung Electro-Mechanics’ own 1Q26 announcement supports the direction of demand. The company reported consolidated 1Q26 revenue of KRW 3.2091 trillion and operating profit of KRW 280.6 billion, with AI server, power and network demand driving growth. It also said demand for high-value-added FCBGA substrates for AI, servers and networks should remain strong in 2Q.

That is enough to say the AI-infrastructure leg is real. It is not enough to assume the whole MLCC market has already become 2017 again.

5. MLCC Price Hikes Are the Swing Factor

Mirae Asset’s upside logic depends heavily on AI server MLCC pricing. The reported scenario analysis frames the operating-profit impact roughly as:

This is why 2Q26 matters. If AI server MLCC ASPs begin to move visibly, the shortage multiple becomes easier to defend. If utilization is high but pricing is slower, the 37x frame becomes more fragile.

The market has already paid for part of the pricing story. It now needs evidence that the price story is not just a sell-side assumption.

6. FC-BGA Is the Structural Leg

MLCC is the shortage signal. FC-BGA is the structural AI substrate signal.

Mirae Asset reportedly raised its FC-BGA ASP assumption by 13%. The logic is that raw materials remain tight, major suppliers are sold out, and customers are willing to support capacity through prepayments, volume discussions and pricing negotiations.

That last phrase should be handled carefully. “Customer support” is different from fully disclosed, legally binding purchase guarantees. Publicly available data does not provide enough detail to verify the size, duration or enforceability of those arrangements. The conservative interpretation is that customer behavior is supportive, but not all of the capacity expansion should be treated as risk-free.

Still, the direction is important for the broader Korea AI PCB thesis. If Samsung Electro-Mechanics can lift FC-BGA ASP assumptions by 13%, that is a read-through for the rest of the Korean substrate ecosystem:

This is why the report matters beyond Samsung Electro-Mechanics. It is one of the clearest large-cap confirmations that AI substrates are moving from a narrative into price, capex and margin numbers.

7. 1Q26 Was the First Accounting Checkpoint

Samsung Electro-Mechanics’ official 1Q26 numbers:

Local coverage also notes a KRW 71.4B one-off retirement-benefit cost tied to changes in wage-base accounting. Excluding that item, underlying operating profit is discussed around KRW 351.4B, which is materially stronger than the headline number.

The headline result already validates demand. The adjusted result validates the margin argument more clearly. The next checkpoint is whether 2Q26 shows:

8. The Stock Is No Longer Undiscovered

Mirae Asset’s KRW 1.3 million target is the high-end call, but the rest of the street has also moved up. Reported target prices include roughly:

That matters. Samsung Electro-Mechanics is not a hidden second-derivative AI name anymore. It has been discovered by the market, and the valuation already reflects part of that discovery.

The May 7 flow also shows a divided tape: foreign investors were net sellers by roughly KRW 70.3B while institutions were net buyers by roughly KRW 47.2B in the local Research OS snapshot. That does not break the thesis, but it argues against treating the trade as a clean one-way crowding story.

9. What Could Break the 37x Frame?

The upside frame is clear. The failure paths are also clear.

The most important distinction is between a real shortage and a priced-in shortage. Both can be true at the same time. The company can be in a strong AI component cycle while the stock already discounts a large part of it.

Final Note

Mirae Asset’s KRW 1.3 million target for Samsung Electro-Mechanics is not just an earnings upgrade. It is a claim about market regime. The claim is that Samsung Electro-Mechanics has moved from a mobile/electronics-component cycle into an AI-infrastructure bottleneck cycle, and that the market can value this cycle with a 2017-style MLCC shortage multiple.

The evidence is not imaginary. Samsung Electro-Mechanics reported a strong 1Q26, AI server and network demand is visible, FC-BGA pricing assumptions have moved up, and MLCC lead-time, utilization and inventory data point to tightness in high-end products.

But the price has already moved into a demanding frame. At KRW 917,000, the stock is around 26.4x Mirae Asset’s 2028F EPS, already above a normal upper-band upcycle multiple and close to a 2018 shortage-peak frame. The remaining re-rating requires the market to accept something closer to 37x.

For the broader Korea AI PCB thesis, this report is useful even if one does not accept the full 37x multiple. It confirms that FC-BGA, MLCC, CCL and low-loss materials are being discussed in pricing, capacity and margin terms, not only as a theme. That strengthens the logic behind the AI PCB hub, Daeduck, Korea Circuit, Doosan Electronic BG, Kolon Industries and Pamicell as linked parts of the same system bottleneck.

The next evidence window is 2Q26: AI server MLCC price realization, FC-BGA ASP, package-solution margins and more concrete customer-commitment language. Until then, the cleanest interpretation is this: the business has improved, the shortage signals are real, and the stock now requires a peak-shortage multiple to unlock the final leg of Mirae Asset’s target-price math.

Source notes: Samsung Electro-Mechanics’ official 1Q26 announcement reported KRW 3.2091T revenue and KRW 280.6B operating profit, with AI server, power and network demand supporting growth. MoneyToday/Daum coverage of Mirae Asset’s May 6 report cited the KRW 1.3M target, 13% FC-BGA ASP assumption lift, 2028 valuation-year shift, 20-24 week MLCC lead times and 95% utilization / 4-week inventory framework. Local Research OS market data confirms the May 7, 2026 close at KRW 917,000.

Disclaimer: For research and information purposes only. Not investment advice. Names cited are for analytical illustration; readers should perform their own due diligence and consult licensed advisors before any investment decision.