Kim Min-kyung

The entire Korean substrate (기판) sector is benefiting from supply tightness and spillover effects as leading FCBGA producers are fully allocated, pushing demand to mid/small-cap names. LG Innotek, a late entrant in server-grade FCBGA, is preparing for a favorable entry by 2027 with room for multiple expansion despite being a latecomer. Daeduck Electronics supplies memory package substrates where no capacity additions have occurred since the 2020-22 cycle, while chip sizes are increasing (DDR5), creating a high probability of shortage in H2. Simmtech similarly benefits from this spillover. A basket strategy on substrate companies (Samsung Electro-Mechanics, LG Innotek, Daeduck Electronics, Simmtech) is recommended.

The entire Korean substrate (기판) sector is benefiting from supply tightness and spillover effects as leading FCBGA producers are fully allocated, pushing demand to mid/small-cap names. LG Innotek, a late entrant in server-grade FCBGA, is preparing for a favorable entry by 2027 with room for multiple expansion despite being a latecomer. Daeduck Electronics supplies memory package substrates where no capacity additions have occurred since the 2020-22 cycle, while chip sizes are increasing (DDR5), creating a high probability of shortage in H2. Simmtech similarly benefits from this spillover. A basket strategy on substrate companies (Samsung Electro-Mechanics, LG Innotek, Daeduck Electronics, Simmtech) is recommended.

The entire Korean substrate (기판) sector is benefiting from supply tightness and spillover effects as leading FCBGA producers are fully allocated, pushing demand to mid/small-cap names. LG Innotek, a late entrant in server-grade FCBGA, is preparing for a favorable entry by 2027 with room for multiple expansion despite being a latecomer. Daeduck Electronics supplies memory package substrates where no capacity additions have occurred since the 2020-22 cycle, while chip sizes are increasing (DDR5), creating a high probability of shortage in H2. Simmtech similarly benefits from this spillover. A basket strategy on substrate companies (Samsung Electro-Mechanics, LG Innotek, Daeduck Electronics, Simmtech) is recommended.

Korean substrate makers are in a multi-year supply shortage. Order backlogs have jumped sharply across package substrate and mainboard names, while larger AI semiconductors, rising layer counts, more complex processes, and lower yields consume capacity faster than aggressive capex can add supply. This drives simultaneous volume, price, and mix improvement. Substrate makers are also signing 3-5 year LTAs and funding equipment with customer prepayments, which makes the cycle less risky than past downturns.

Korean substrate makers are in a multi-year supply shortage. Order backlogs have jumped sharply across package substrate and mainboard names, while larger AI semiconductors, rising layer counts, more complex processes, and lower yields consume capacity faster than aggressive capex can add supply. This drives simultaneous volume, price, and mix improvement. Substrate makers are also signing 3-5 year LTAs and funding equipment with customer prepayments, which makes the cycle less risky than past downturns.

The global MLCC market is entering a genuine supply shortage. Murata and Samsung Electro-Mechanics are already near full utilization, and even Taiyo Yuden is moving above 90% utilization in H2 as AI-server demand pulls in lower-entry-barrier suppliers such as Yageo. Because capacity is shifting to high-priced AI-server MLCCs, lower-priced IT/mobile/PC MLCCs are tightening first; actual price increases started in late June, and the same AI-server 1005/47 microfarad product priced in LTAs rose more than 20% between May and July, supporting steeper price hikes into 2026.

The global MLCC market is entering a genuine supply shortage. Murata and Samsung Electro-Mechanics are already near full utilization, and even Taiyo Yuden is moving above 90% utilization in H2 as AI-server demand pulls in lower-entry-barrier suppliers such as Yageo. Because capacity is shifting to high-priced AI-server MLCCs, lower-priced IT/mobile/PC MLCCs are tightening first; actual price increases started in late June, and the same AI-server 1005/47 microfarad product priced in LTAs rose more than 20% between May and July, supporting steeper price hikes into 2026.

If the fund-type pension system is activated, the 550 trillion won currently accumulated in retirement pensions could flow into the Korean stock market, providing long-term structural support similar to US 401(k) and Australian superannuation schemes, which would be very positive for KOSPI and KOSDAQ.

AI data center demand is driving MLCC and substrate shortages with limited supply, leading to price increases. Samsung Electro-Mechanics has secured a direct supply contract with a major big tech firm and is expanding capacity, supporting margin expansion. She raised her target price to 300,000 KRW and recommends buying a basket of Korean semiconductor substrate and component stocks including Samsung Electro-Mechanics, LG Innotek, Daeduk Electronics, and Simmtech.

She holds LG Group ETF in her IRP (Individual Retirement Pension) account, indicating a positive outlook on the group's performance.

She is investing in AI power infrastructure ETF, which has declined recently, as part of her sector allocation.

She is accumulating India ETF after a large decline, using dollar-cost averaging to build a 10% allocation in her personal pension account.

For minors' retirement savings, consistently buying S&P 500 ETF monthly (e.g., 200,000 won per month) is recommended because of the long-term upward trend and the benefit of tax deferral within a pension savings account.