Samsung SDI cuts back battery pack business from China, expands at home

來源: 開云體育app官方網站 時間: 2023-02-01 08:51:30

Samsung SDI's battery cell manufacturing plant in Xi'an, China / Courtesy of Samsung SDI

By Baek Byung-yeul

Samsung SDI has cut back its battery business in China as part of a strategy to streamline overseas production lines by suspending non-core and low-performance businesses, company officials said Monday.

The firm notified the Financial Supervisory Service recently that it closed down its battery pack-manufacturing subsidiaries in China ― Samsung SDI Changchun Power Battery and Samsung SDI Wuxi Battery Systems.

Samsung SDI liquidated the two battery units due to their poor performance. Operation of the Wuxi subsidiary had already been virtually suspended, with no sales generated in 2020 and 2021. The Changchun subsidiary, which Samsung SDI had acquired from Magna Steyr, also failed to obtain a new contract and was liquidated after fulfilling all outstanding orders.

Although the company said the withdrawal from China was a part of streamlining its overseas production lines, the battery industry presumed that the withdrawal could be related to the Chinese government's regulations on Korean battery companies.

Aiming to nurture domestic battery manufacturers, the Chinese government decided in 2016 not to offer subsidies to electric vehicles equipped with batteries from Korean makers. This was Beijing's apparent retaliation against Korean companies after bilateral relations turned sour amid diplomatic tension over Seoul allowing the deployment of a U.S. Terminal High Altitude Area Defense (THAAD) system here.

However, a Samsung SDI spokesman denied the speculation, saying the withdrawal of its battery pack plants in China was the company's choice to streamline its business there.

"We have already announced through disclosure that we will liquidate two of the Chinese subsidiaries to improve management efficiency. The withdrawal issue has no relation to such speculation," the spokesman said. "We are still operating battery cell manufacturing lines in Tianjin and Xi'an."

Samsung SDI's research center in Suwon, Gyeonggi Province / Courtesy of Samsung SDI

While the company streamlines its business in China, the battery maker is also expanding research and development capabilities on its home soil.

The company said Monday that it began construction of a pilot production line for solid-state batteries at its research center in Suwon, Gyeonggi Province.

Solid-state batteries are viewed as the "next big thing" in the battery industry because they are potentially safer and have higher energy densities by using solid electrolyte materials. More research is needed before they can be mass produced, but the battery industry presumes that companies that have secured technology for solid-state batteries will be able to take the lead in the highly competitive electric car battery business.

Samsung is known to have the highest level of capabilities in solid-state battery research. In 2020, Samsung Advanced Institute of Technology published its research results in the scientific journal Nature Energy on a solid-state battery that can be charged and discharged over 1,000 times with a range of 800 kilometers on a single charge.

"The pilot production line is being built on an area measuring about 6,500 square meters. The line will be called S Line," the company spokesman said.