Samsung SDI is aiming to turn a profit from its electric vehicle (EV) battery business next year, the company said at its conference call for the second quarter.
It is the first time that the company publicly mentioned when it aims to make a profit out of the business.
Samsung SDI makes small-sized batteries such as circular and polymer batteries as well as mid- to large-sized batteries for the car industry.
Its circular batteries are used in e-bikes, e-scooters, wireless cleaners and other devices while its polymer models are used in smartphones and notebooks. It makes its profits from these small-sized battery businesses.
It has not made a profit from its mid- to large-sized battery business as development for these usually takes longer until they are supplied for an EV model. It is also difficult to cut prices down due to cost.
Other battery makers are faced with a similar situation. LG Chem has posted profits from its EV battery business for the first time back in 2018, but that was for a single quarter and it remained in the red for the year.
Panasonic made an annual profit for the first time in 2019, while SK Innovation said it aims to turn a profit in 2022.
Samsung SDI is aiming to expand its EV battery business this year to have sales grow 50% compared to last year.
As Europe is expected to expand EV sales in the second half of the year, it is highly likely that the South Korean battery maker will post strong profits and sales in the second half of the year compared to the first.
The company’s battery business posted 3.7123 trillion in sales in the first half and is expected to mark over 4 trillion won in the second half. Its supply of small batteries for upcoming wireless earphones and demand from energy storage systems will likely help as well.
Its electronic materials business will also likely benefit from demand from DRAM and other semiconductors. Its materials for OLED will see increased demand thanks to upcoming flagship smartphone launches. Samsung SDI said it expects annual profits and sales to improve from last year. Its polarizer film sales exceeded its target in the first half of the year and will remain solid throughout the year thanks to demand from TVs, the company said. Demand from IT devices will slowdown however, it said.
Samsung SDI has posted operating profits of 103.8 billion won and revenues of 2.5586 trillion won in the second quarter of the year. It is a fall of 34% and increase of 6.4%, respectively.