Substrate Shortage Is Coming Again—What Will Happen to Stock Prices? | Kim Minkyeong, Senior Researcher, Hana Securities Research Center

Summary

In this Double Up interview, Hana Securities senior researcher Kim Minkyeong argues that electronics component and substrate fundamentals are strengthening even as stock prices have corrected. She sees MLCC and substrate shortages accelerating into year-end, with Samsung Electro-Mechanics as her top pick and Korean substrate makers including Isu Petasys, Daeduck Electronics, Simmtech, and TLB benefiting. The main market implication is that price hikes and rising order backlogs can eventually close the wide valuation gap.

• Korean electronics sector corrected since July but fundamentals and earnings momentum have improved.
• MLCC supply is tightening as top suppliers run near full utilization and AI-server demand pulls in second-tier suppliers.
• Samsung Electro-Mechanics remains top pick with a KRW 300,000 target and potential estimate increases.
• Substrate makers are seeing sharply higher order backlogs, rising utilization, and improving prices.
• Substrate capacity expansion is constrained by larger AI chips, higher layer counts, and lower yields.
• Substrate makers are signing 3-5 year LTAs and increasingly using customer prepayments for capex.
• Memory package substrate is emerging as the next shortage, with Simmtech flagged as a key beneficiary.