LG Energy Solution has been facing difficulty in applying a new production process at its battery factory at Nanjing, China.
The company has effectively given up on applying laser notching to the production line there.
It had canceled its contract with DE&T, which supplies the laser notching equipment, on Monday.
The contract has been signed between LG Energy Solution and DE&T on October 27, 2020 and was worth 6.1 billion won, the equivalent of 20% of the latter’s annual sales in 2019.
The South Korean battery maker had attempted to swap out its press notching equipment at the factory in Nanjing with the new laser notching equipment, a person familiar with the matter said.
However, it was planning to continue to use press notching to manufacture batteries at the factory, they added.
LG Energy Solution’s decision is bad news for DE&T. The equipment maker had won a supply deal for its notching equipment with Ultium Cells, the joint venture between LG Energy Solution and General Motors in the US, and had been winning orders for its kits.
DE&T has been attempting to reduce its reliance on the display sector and expanding in the battery sector.
A company spokesperson said the notching equipment Ultium Cells will be delivered next month as scheduled.
While laser notching has many advantages over press notching, it seems it will take time for the method to be applied in mass production.
Battery makers will need to see whether laser notching equipment fits in with existing kits in production lines and how it affects yield rate.
The notching process creates positive and negative tabs on the battery. Press notching uses blade-shaped molds.
Using laser instead of a mold means the mold doesn’t need to be replaced constantly, which saves costs.